Hon. Members: Object.
	 The debate stood adjourned; to be resumed on Thursday 5 February.

Hon. Members: Object.
	 The debate stood adjourned; to be resumed on Thursday 5 February.

Linda Gilroy: I hear what my right hon. Friend says, but in the case of Tory-controlled Plymouth city council, it took the combined efforts of myself, the shadow leader and the local councillor to get some rubbish removed for Mr. Pickford in Vauxhall street. It took more than a week, and even when he reported rat infestation, he received a very flippant response. Will the Minister take an interest in ensuring that the quality of service, which was designed to be improved last November, does in fact improve?

Eric Illsley: As my right hon. Friend knows, best practice in waste management is recycling. As she mentioned, the Government have a very good record on that, but we could improve it even more. Local authorities' recycling targets are not measured by product, but by weight; if we had material-specific targets, recycling could be improved, as it could if we also removed the distinction between the collection of domestic and commercial waste in some circumstances. Will the Minister revisit those issues?

Jane Kennedy: My hon. Friend will know that the waste strategy was published in 2007, and the new economic climate in which we are operating requires us to keep all such matters under review. He has made his point in writing and at meetings. He raises an interesting point, which I will want to study further, but it is worth knowing that a lot of good work is already going on. Just this week, I visited a business in the centre of London, in Great Titchfield street. The business is called i-level; it is a digital media agency that is working with Alupro, the Aluminium Packaging Recycling Organisation, on the "Every Can Counts" initiative, which is all about the recycling of just aluminium and steel cans in a highly specific way. As I said, a lot of good work is going on, but there is always more that we can do.

Jane Kennedy: It is obviously a matter for local authorities to determine how local household waste is managed, how it is collected and how much recycling is performed. I have already described the improvements across England in respect of the proportion of household waste recycled. If the hon. Gentleman's local authority is behaving in a way that he disapproves of, let me tell him that in my experience, because of the importance to every household of dealing with waste, this is one of the most highly political issues. It is therefore very important for local authorities to be aware of what their communities are saying.

Hilary Benn: My right hon. Friend, who has great experience in these matters, of course, is absolutely right: in the end, we have to get agreement across Europe to make the change. The agricultural policies that are pursued in Europe do have an impact on some of the poorest farmers in the developing world. That is relevant to the question of food security, because an urgent task we face is to support a growth in agricultural production, particularly in the developing world, to feed a rising population, and that is harder for a farmer to do if they do not have a market and cannot see an incentive. I welcome my right hon. Friend's suggestion that we should encourage this debate, looking at all aspects of the importance of agricultural production and at making sure Europe has the right policy, but in the end we have to get consensus.

Hilary Benn: If the hon. Gentleman would like to draw attention to the specifics of the home-grown regulation to which he is opposed, it would be interesting to hear what he does not want us to do. As he knows, the vast bulk of the regulation comes from Europe—and the nitrates directive, for example, was agreed not by a Labour Government but by his party in 1991, so it would have to answer for the form that that took. We worked very hard last year to implement the changes that were required under that legislation in such a way as to minimise the impact on farmers.
	I have already indicated what our position is in relation to electronic identification for sheep. As the hon. Gentleman will know, we have been fighting the pesticides regulation because we do not think that the case has been made, particularly given that there has been no proper impact assessment in Europe. A message that could be sent from both sides of the House to Europe—both in current circumstances, when times are tough, and more generally—is that we should do the things we need to do to deal with problems, but we should not add to farmers' responsibilities if it is not strictly necessary.

Hilary Benn: May I take this opportunity to welcome the hon. Gentleman to his Front-Bench position? I know that he has a very strong personal commitment to the issues that he will now be dealing with as the Opposition spokesperson. I wish him a long and very successful career as the shadow Secretary of State.
	We will be producing the draft floods and water Bill for scrutiny in the not-too-distant future—in the spring. Clearly, it takes time to work out what changes in legislation are required. I reject the hon. Gentleman's accusation that DEFRA is a Department responsible for delay. The figure I gave earlier of the number of flood defence schemes that we have got on with and implemented in the year and a half since the great floods of 2007 shows that this is not a Department that is delaying things, but one that is committed to getting on with things and providing greater protection to people.
	Secondly, it is not as though we have waited for legislation. Although in some respects there is a lack of legal powers to make things happen, we have already indicated to local authorities that the upper tiers will have responsibility for dealing with surface water flooding. We have also got on with funding and, as I announced to the House in December, the first group will start preparing the plans. We are not waiting for the Bill to get on with the work, but if we do need powers to ensure that we can protect people as fully as possible from flooding, that is what the Bill will achieve.

Hilary Benn: DEFRA's responsibility is to enable us all to live within our environmental means. Last week's United Nations Environment Programme governing council agreed to negotiate new international controls on the use of mercury. That will be an important step forward in protecting human and environmental health and has been widely welcomed by Governments and NGOs. This agreement clearly demonstrates the value of the United Nations.

Huw Irranca-Davies: I thank the hon. Gentleman for that question and, although we have met on other occasions in Committee before, I welcome him to his first DEFRA questions as an Opposition spokesman. He is right that this is an important issue. The angling fraternity in the UK is huge: it has an important function socially as well as economically, and its members are known for their environmental concerns. We share the concern about the need for an adequate definition of "recreational angling", as the definition applied in other EU member nations is not the same as the one that affects us here. We are actively engaged in work on this with the Commission, and I join the hon. Gentleman in welcoming the comments by Commissioner Jo Borg. We shall continue our work, and I welcome the hon. Gentleman's support in highlighting those concerns.

Huw Irranca-Davies: Taking your guidance, Mr. Speaker, the Environment Agency has been in touch with the company Living Fuels about the use of cooking oil as a fuel. The process has been thorough and has taken some time, but I am pleased to say that the agency's chief executive has written to the firm's managing director to accept the offer of a meeting to discuss the matter further and take it forward.

John Pugh: I will be brief, but it is a hard question. What is the Minister doing about the tendency of some retailers and waste authorities to stockpile electrical waste simply to sell it at premium and inflated rates to the producers' organisation REPIC—the Recycling Electrical Producers' Industry Consortium? That makes the waste electrical and electronic equipment directive more costly and makes producers' responsibilities harder to discharge.

Vera Baird: I can neither confirm nor deny any such thing. It is not our intention to give a running commentary about the details of the ongoing deliberation process. The Attorney-General has written to the hon. Gentleman, as he knows, and a copy of the letter is in the Library. It indicates the stage we are at—whether there should be an investigation is ongoing—and the Attorney-General will report to Parliament when she has made a decision.

Vera Baird: Once again, I have no doubt that the right hon. and learned Gentleman is right in the factors he puts forward that must play a role in considering the public interest. Let me simply reiterate what the Attorney-General has been asked to do, and the court wishes her to do; it is to see whether there should be an investigation, so please let us not put the cart before the horse. There will obviously be opportunities to look further at the matter. The Attorney-General has made it very clear that she will report to Parliament when she has completed her assessment.

Vera Baird: They obviously will be. I do not know how many times one has to explain that to the Liberal Democrats. The decision whether to prosecute or not will not be taken by the Attorney-General or by me unless it is one of the offences on which Parliament has said the decision must be taken by the Attorney-General or the Solicitor-General so they cannot avoid it. In all other situations, the decisions will be taken by the independent Crown Prosecution Service and the investigation that precedes any such decision taken obviously by the police.

Jonathan Djanogly: Does the Solicitor-General not accept that most people see this as a cover-up of state-sponsored torture by a Government who supposedly introduced the Human Rights Act?

Vera Baird: My hon. Friend makes a strong point. He is a well known supporter of disabled rights, and I compliment him on the perseverance with which he pursues those interests. I can answer only for the prosecution authorities; the mental health tribunals do not fit into my responsibility. I suggest that my hon. Friend raises the issue with the Secretary of State for Justice, from whom I am sure he will get a sympathetic response.

Alistair Darling: With your permission, Mr. Speaker, I shall make a statement on the bank asset protection scheme and today's agreement with the RBS Group. I hope that the House will understand, again, that it was necessary for the Treasury and RBS to issue market notices this morning, in the usual way.
	In my statement to the House last month, I set out the principles behind the Government's proposals to put the banks on a stronger footing, insure their balance sheets, and boost bank lending. I can now tell the House that those measures are being implemented: at the end of January, the Bank of England's temporary special liquidity scheme was replaced with a permanent facility; last week, the Bank of England began purchasing assets to free up markets for commercial lending; and on Monday, Northern Rock announced that it would provide up to £14 billion of new mortgage lending.
	Banks are at the core of all modern economies—they allow people and companies to make payments, and to save and invest for the future. Indeed, if we and other countries do not fix the banking system, we will not fix the rest of the economy. The basic problem that we are facing is a crisis of confidence about bank assets, which is preventing the UK banking system from providing loans for businesses, and mortgages for those who want to buy a home. The critical barrier to improving confidence and expanding lending is the uncertainty about the value of banks' balance sheets. We must now enable banks to clean up their balance sheets so that they can become stronger and rebuild for the future, making them more able to lend to people and business all over the country. That will not happen overnight, but it is the essential starting point; it must go hand in hand with a broader reform of supervision and regulation of the banking sector; and that action must be taken not only here but by Governments right across the world, because the alternative is a failure of the banking system, here and elsewhere, which will make the recession longer and more painful, putting more jobs at risk.
	The challenge today is to provide certainty against a background of a sharply deteriorating global economy. The IMF, which in October was forecasting world growth this year of 3 per cent., is now forecasting growth this year of close to zero. In the last quarter of last year, the world economy shrank for the first time since 1945, with Japan, America, Germany and Europe, as well as the UK, all now in recession. All that followed from the sudden collapse in confidence when Lehman Brothers—the world's fourth biggest investment bank—went bankrupt in the autumn. That has meant even weaker banks, which are lending less, and in turn leading to further economic weakness. So getting the banks to lend again is essential to our economic recovery and to our fight against the global economic—financial—recession.
	In October, we injected additional capital into the banking system to prevent the collapse of banks and to maintain their ability to lend to companies and home buyers. We had to act quickly—in a matter of hours, not months. We made available then up to £50 billion initially, of which £37 billion was taken up. I have always said that we stand ready to do whatever it takes to maintain financial stability. So, as well as additional contingent capital, today I am making a further allocation of £13 billion for RBS in return for non-voting shares. These shares will be purchased at a similar price to those purchased in October, and they in turn will pay a preference coupon.
	The Government are currently set to own up to 70 per cent. of RBS, for which the taxpayer will benefit when the bank recovers and strengthens in value. We believe it is important that there remains some private ownership in RBS—by pension funds and individual investors, for example. We have therefore decided that in injecting this capital, we will do so by purchasing non-voting shares, in line with practice in other countries. That means that the Government could now own up to 84 per cent. of RBS in economic terms, but the institution will remain as a privately quoted company. That will provide potential gains in the long term for the taxpayer and an easier return to full commercial ownership when the shares are sold and the proceeds come back to the taxpayer.
	In January, we announced the creation of a scheme to identify losses and clean up the banks' balance sheets, giving them the confidence to lend again. A range of different mechanisms have been suggested to do that, but in the end they all require the same basic approach: first, a thorough analysis of the banks' balance sheets to establish what their assets and loans are worth and whether they are likely to be fully repaid; and secondly, a comprehensive stress test of whether the banks are strong enough to survive bad economic scenarios and establish what further losses the banks can bear, to satisfy us that the banks have enough capital to get through the recession and to keep lending going. Thirdly, it enables the Government to judge the necessary scale of their intervention, either by buying up the assets or insuring them, in return for a fee or a share of future gains.
	That is the approach that we will follow in the asset protection scheme that I announced in January. In arriving at the design of the scheme, we have taken account of the experience of other countries which in recent months have announced similar action: including the Swiss, with UBS; the Dutch, with ING; and the United States, with Citigroup and Bank of America. The scheme is open to all eligible banks and building societies, and I expect a number of them to apply to use it according to this approach. Lloyds Banking Group has today confirmed that it is in discussions with the Treasury regarding participation in the scheme.
	In relation to RBS, which has announced its results today, let me set out how the asset protection scheme will be applied. When the Government purchased their stake in December, a new management team was put in place, and it has been going through the books, identifying potential losses. As the House will understand, that cannot be done quickly, because the assets are both complex and numerous. As we have seen only recently in the case of the United States, the valuation of these balance sheets takes considerable time, and all the more so if it is done against a background of sharply deteriorating global conditions.
	Today, the chief executive of RBS announced a plan to restructure and rebuild the bank, including an agreement to extend its lending in the UK. To complement that, RBS will include £325 billion-worth of assets in the asset protection scheme. That will include a range of assets in the UK and abroad, most of them including mortgages and business loans that are currently hard to value. The Treasury, with the help of external advisers, has assessed the assets held by RBS and subjected its balance sheet to a series of different stress tests overseen by the Financial Services Authority and the Bank of England—a practice that the United States Government yesterday announced they will apply to institutions seeking support.
	To protect the taxpayer, RBS will have to bear the first portion of any additional losses over the coming years, up to a total loss of 6 per cent., or some £20 billion, on top of the £22 billion of impairment and write-downs that it has already taken. As in any insurance scheme, RBS will have to bear the first losses. After that, the Government will cover up to 90 per cent. of any further losses. RBS will also pay a fee of 2 per cent. of the value of the assets insured—some £6.5 billion—again, as in any insurance scheme. It has also agreed for a number of years not to claim certain UK tax losses and allowances, meaning that when it does return to profitability it will not be able to benefit from the losses accrued in the intervening period.
	In return for this, RBS has agreed to maintain and increase its lending for mortgages and businesses in 2009 by an additional £25 billion, with a further £25 billion in 2010 depending on market conditions. That is at the heart of the deal that we are striking with RBS. That new lending will be on top of maintaining lending on mortgages and other loans of just under £300 billion in the UK. These lending commitments with be legally enforceable and externally audited, and the Treasury will report annually on RBS's delivery of its lending agreement. RBS has agreed to continue treating its customers fairly, including by participating in the Government's home owner mortgage support scheme. That will go hand in hand with the tough conditions on RBS bonuses that we announced last week.
	Together, these measures will help restructure and rebuild RBS, making one of the UK's biggest banks also a stronger bank, better able to serve the people and businesses of this country, returning to tried and tested principles of banking. Other participating banks that join the scheme will have to agree to make more lending available, and banks will also have to review their policies on pay and bonuses to come up with long-term strategies that prevent excessive risk taking and reward successes, in line with the FSA's new code of remuneration practice.
	As with previous measures, the capital support for the banks is an investment that will eventually be sold to the benefit of taxpayers. With the insurance scheme, the eventual cost to the taxpayer over the lifetime of the scheme will depend on economic conditions and how the assets are managed. That means taking that risk on to the taxpayer for a fee, but in a way that ensures that the banks remain able to lend. That strategy for tackling the bad assets has worked elsewhere in the past. So while the taxpayer does face risks as a result, the cost of doing nothing is far greater. In the long term, the taxpayer will benefit from returning our stake in these banks to full commercial operation because, as I have said before, I am clear that British banks are best owned and managed commercially, and not by the Government.
	The future of the UK as a financial centre, and the future of our economy and thousands of jobs, depend on being able to run banks commercially. All countries are having to deal with the same problem: how to isolate assets that are damaging confidence in the banking sector and preventing banks from lending more. Over the coming weeks we will continue to discuss with other countries, including the new US Administration and with the European Union, how best to co-ordinate our approach to the common challenges we face. As part of our presidency of the G20, I have written to Finance Ministers setting out a set of principles for dealing with asset protection and insurance.
	It is essential to restore confidence in the banks to allow them to clean up and rebuild, and get lending going again. The economic recovery, and thousands of jobs, depend on it, and I commend this statement to the House.

George Osborne: I thank the Chancellor for his statement, but to be blunt, we have heard all these claims before. Back in October, just like today, he told us that a huge taxpayer bail-out of the banks would "get lending started again". He stood there waving a piece of paper, just as he has again today, and claimed that he had binding legal agreements with RBS, yet of course business lending has fallen by £5 billion since October and, as the inflation report shows, continues to fall.
	Back in October, just like today, the Chancellor said that his first bail-out was a good deal for the taxpayer. Indeed, the Prime Minister claimed that we would soon be making money on the shares that we had bought. But now we all know that the taxpayer has lost £16 billion to date on the deal that was done in October. Back in October, just like today, the Chancellor said that a key condition of the bail-out would be an end to excessive bonuses and rewards for failure, yet today we discover that the chief executive who helped to bring RBS to its knees is getting a £650,000 a year pension for life, negotiated with the Government. While a second bail-out seems inevitable, we will therefore treat the Chancellor's claims about his latest plans with a healthy degree of scepticism.
	Let me ask the Chancellor these specific questions. First, on lending, he says that RBS has committed to lend £25 billion a year. Will he confirm that that represents just 3.4 per cent. of total RBS lending to non-bank customers? He said once again, as he often has, that he has a legally binding agreement, but the new chief executive of RBS said on the radio this morning that that agreement is subject to its continuing to price on arm's length terms. Given that that price is currently prohibitive to many businesses large and small, why does he expect this legally binding agreement to be any more binding than the last one? Indeed, he says that the lending agreement is legally enforceable. How exactly is he going to enforce it? Will he give RBS the money to pay the fine when he enforces the agreement?
	My second set of questions are to ask the Chancellor to be absolutely straight with people about how much the taxpayer could lose. Of course, this is a sweet deal for the banks, their management, the remaining shareholders and above all their creditors. The first loss to be borne by the bank is just 6 per cent. That is much lower than the 10 per cent. that the Treasury was initially briefing and the 10 per cent. that the Dutch authorities have imposed on ING. The fee is just 2 per cent.—half the level that the Treasury set out to try to negotiate—and it is being paid only in non-voting shares. Will the Chancellor confirm that that is because otherwise, according to stock exchange rules, RBS would stop being listed altogether? What is more, we are giving the bank billions of pounds to pay the fee to ourselves. That is like saying, "Lend me a tenner and I'll buy you a pint."
	Will the Chancellor now say exactly what the potential exposure of the taxpayer is under this deal? He did not answer that question on the radio, so will he answer it today? Will he now impose the full independent, asset by asset audit of the British banks that the Governor of the Bank of England has just called for in the Treasury Committee and that I called for at the Dispatch Box last month?
	Finally, on excessive bonuses and rewards for failure, once again the Chancellor has promised there will be none. Yet this morning he said in his radio interview that he learned only a very short time ago that Sir Fred Goodwin was paid off with a £650,000 a year pension funded by the taxpayer. However, the new chief executive, who was on the same radio programme, said that the deal was negotiated with the Government. Who exactly in the Government knew about that deal? Will the Chancellor answer the claims that Fred Goodwin's departure was delayed so that he could secure that pension? Whichever way one looks at it, that obscene pension is unacceptable and the Government are on the hook. Either they did know and failed to act or they did not know and failed to ask the right questions. It is a totally irresponsible use of taxpayers' money. There is, of course, now only one person who can correct that huge error of judgment by the Chancellor, and that is Fred Goodwin himself, who should in all decency renounce his pension.
	The Government have no option but to undertake a second enormous taxpayer bail-out of the banks, because the first enormous taxpayer bail-out has failed. Let us hear no more nonsense about what a good deal has been struck. The British taxpayer is insuring the car after it has crashed. The sad truth is that families throughout the country pay the price, while those responsible try to walk away from the wreck—so far, unscathed.
	The Prime Minister who presided over the fiasco is off trotting on the world stage while the man he knighted, Fred Goodwin, is walking off with a £650,000 a year pension. That is why the Government have lost the confidence of the British people in their ability to deal with the recession that they helped create and the banking crisis that they failed to prevent.  [Interruption.]

Alistair Darling: First, once again, it is clear that, although the hon. Gentleman could not quite bring himself to say it, he agrees with what we are doing. Although he now tries to criticise what we did last October, at the time he expressed full agreement with it, because he recognised that our banks, along with those in other parts of the world, faced collapse, and that we had to step in to recapitalise them. We had to do it quickly—in a very short time. We did not have the luxury of months to go through the books and make decisions about what might happen further down the track; we had to take action quickly. At that time, the Opposition supported our actions, although they subsequently found it convenient to change their mind and walk away from that support.
	On the agreement that we reached in October, we said that the banks in which we took major shareholdings—RBS and Lloyds TSB—would undertake to maintain the same level of lending as in the previous year. They have been able to do that, but against a background of a marked reduction of lending in this country, especially from foreign banks, which have either withdrawn to their own countries, or in the case of the Icelandic banks, for example, have got into such great difficulties that they cannot lend. In the last quarter of last year, there has also been a sharply deteriorating position in the economy.
	We want—it is important—to get lending going again because, as I said earlier, if we do not fix the banking system, it will be difficult to fix the wider economy. It is a problem that we face, the Americans face, the Germans face, the Japanese face—right across the world. That is why I said in January that we would have to do something about the problem of assets on bank balance sheets that people either could not value or had deteriorated in value because of what is happening in the economy. As a result of what we have been able to do, RBS will increase its lending by £25 billion this year and next year, on top of the £300 billion that it currently lends in this country.
	I believe that the insurance rates are appropriate. It is also right to put in the additional capital to help the bank get through the recession. Nobody wants to be in that position—no Government wants to be in that position—but, throughout the world, we must all face up to the fact that banks need additional capital and that we need to ensure that they have a proper insurance scheme to enable them to continue lending.
	The hon. Gentleman asked about audit. I said in my statement that there needs to be a thorough audit of banks that come into the scheme. I am aware of what the Governor of the Bank of England said this morning—I have heard him say it on previous occasions. I agree that, especially when insurance is involved, there needs to be a rigorous audit, not only so that banks understand the position, but so that we do, too.
	The hon. Gentleman mentioned the remuneration of Fred Goodwin. It is beyond doubt that most people find it hard to understand, given what has happened to RBS, that such an enormous pension can be paid from the age of 50. Let me explain the position. First, the agreement was not negotiated by the Government; nor was it approved by the Government. Nor would it have been— [Interruption.]

Alistair Darling: The agreement on remuneration—the pension arrangements—of employees of a bank is a matter between the employee and the board of directors. Last autumn, we were told that there was a contractual agreement between the bank's board and Sir Fred. We previously understood that his pension arrangements were an unavoidable commitment, but we did not know—we became aware of it only very recently—that the decision of the previous board of RBS to allow Sir Fred to take early retirement had the effect of increasing his pension entitlement, and that that might have been a discretionary choice. We did not know that and, on finding out—[Hon. Members: "When?"] Last week, actually. It became clear that the matter may have been a discretionary choice. When we found out, I asked United Kingdom Financial Investments, which holds the shares, to discuss with the new board of the bank whether there was any scope for clawing back some or all the pension entitlement, and whether the board made the decision in full knowledge of the facts. That investigation is going on at the moment. As I said, and I agree with the hon. Gentleman, the matter could be concluded swiftly, because Sir Fred Goodwin could decide not to take the pension—that has been put to him—but the ball remains in his court.
	I believe that the measures that we have taken on RBS and the asset protection scheme are necessary and unavoidable. It is an essential part of what we must do and what other countries must do if we are not only to fix the banking system but, more important, to ensure that we can rebuild our economy and help people and businesses in this country.

Vincent Cable: In October, we broadly supported the Government because we thought that that was the right patriotic response in an emergency and because their proposals for bank recapitalisation were sensible. However, I am afraid that they have now almost completely lost the plot. The proposal for asset protection is a disgrace and a betrayal of the taxpayer's interests. It is a classic case of privatising profits and socialising loss.
	We know from American experience that valuing bad assets is hideously difficult. We also know that the banks know more about their bad assets than the Government, so there is now an open invitation to the banks to dump their worst assets on the Treasury, for a fixed fee, knowing that the taxpayer will pick up 90 per cent. of the losses. That is a fraud at the taxpayer's expense.
	There is a much better approach—the way in which the Government started dealing with the problem. It is to acquire shares in the banks—ordinary shares with full voting rights. That guarantees that any upside in recovery—if there is one—and any eventual sale fully accrues to the taxpayer. It also gives the Government full effective control over banks' lending strategy and remuneration, instead of the current feeble agreements, which the banks have treated with contempt.
	We know what the Government are afraid of: being accused of nationalisation. Let me quote what the Government's old friend—the Prime Minister's hero—Mr. Alan Greenspan said about that only last week. That American Republican free-market ideologue stated:
	"It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring"
	to
	"allow the Government to transfer toxic assets to a bad bank without the problem of how to price them"—
	the problem we have today.
	"You",
	he said to the Government,
	"should not get caught up on a word"—
	that is, nationalisation. He continued:
	"It doesn't matter what you call it, but we can't keep on funding these zombie banks without gaining public control."
	The problem is that we have not only zombie banks, but a zombie Government: the walking dead, controlled by people who have a strong vested interest in protecting their bonus arrangements and covering up large-scale tax avoidance scams.
	The Government claim credit for being tough and stamping on the generous bonus arrangements of RBS and NatWest. I totally agree with the Conservative shadow spokesman—[Hon. Members: "Shadow Chancellor!"] I agree with his comments about Sir Fred Goodwin.
	He was absolutely right. He could also have asked—and I will ask—how much in addition the Government have given to Sir Fred Goodwin and people in his position in tax relief.
	However, there is a wider point about bonuses: they are public expenditure. These bonuses are a massive spending increase on public wages for which there is no justification whatever. What response will the Chancellor give this morning to Barclays, which has said that it will not deal with the Government unless all its bonus arrangements are fully protected? That is blackmail and he should make it absolutely clear that he will stand up to it.
	I have one final question about what the Prime Minister said in the paper on Sunday about the proposal, which a growing number of people on all sides accept, that in the long term the low-risk high street lending activities of the banks have to be separated from the high-risk casino-type activities with which they have been associated. The Prime Minister seems to have capitulated to pressure to abandon that proposal altogether. I can understand why the banks want to hang on to the operations that generate their bonuses, but why on earth should the Government be giving a long-term guarantee for gambling activities on a global scale? It is incomprehensible and completely without justification.
	I feel rather sad about this response, because I normally try to be constructive, but the Government's proposal is absolutely dire.

Alistair Darling: On the last point that the hon. Gentleman made, there has been a lot of debate about whether banks should be separated, so that they organise themselves along the lines that they did in America for many years, into what he calls low-risk retail banks and, on the other hand, investment banks. I would just remind him that the first bank that got into trouble in this country was not an investment bank, but Northern Rock, which is a retail bank. The problems that have been experienced have been experienced both by banks with complex models, as well as investment banks pure and simple—indeed, many have now collapsed—and by retail banks. The regulatory system should distinguish between the two. Perhaps on another occasion there will be an opportunity to discuss what we need to do on supervision and regulation.
	In relation to the hon. Gentleman's broader point, about nationalisation—the one on which he takes fundamental issue with the Government—I just disagree with him. We have, as it happens, nationalised a bank already: Northern Rock. However, I have always made it clear that our long-term objective is to get that bank and the banks in which we have shareholdings operating back in the private sector. That is something that the Liberal party and he agree with. I therefore do not believe that it is in our interests to completely squeeze out the remaining part of the private shareholdings in RBS, which is what nationalisation would entail. Also, as we have 70 per cent. of the votes there, it is beyond doubt that we control the bank. It is not as though it could block a decision that we really insisted upon.
	It is important to strike the right balance. Even in these times, we need to look at the long-term destination of those banks. It is right that we should strike that balance, as I said earlier this morning. I just think that the hon. Gentleman is plain wrong in what he said about that.

Dennis Skinner: Is the Chancellor aware that we all recognise that the reason why today's measure have been announced, as well as the previous one, is to ensure the bank deposits of the vast majority of people in Britain? However, it is becoming increasingly apparent with every statement that those in the banking fraternity have, by and large, been on a winner for a long time. They are no different, really, from Nick Leeson and that fellow Madoff in America, who made off with the money. I have a novel suggestion for the enemy within. Instead of paying out vast executive bonuses and Freddie Goodwin's massive £650,000 pension, why not tell them that those of us on the Labour Benches will gladly walk through the Lobby to ensure that all those executive bonuses and that pension fund for Freddie Goodwin and his mate will be paid for out of the toxic debt when it has been repaid, which will be never? That is the proposal that we ought to put to those bankers and we should treat them with the contempt that they deserve.

Liz Blackman: Bank lending in Erewash is, like everywhere else, pretty variable and constrained by the current climate of uncertainty. The freeing up to lend initiative that was announced this morning has the prospect of helping some of the businesses and the families in my constituency, but can my right hon. Friend give some more detail about how it will be monitored locally, so that RBS does what we are asking it to do?

Alistair Darling: As I have said, we will be publishing an annual report. Into how much detail and how local it can go remains to be seen, but in addition, it is important that we regularly monitor lending to ensure that it starts flowing through to individuals and businesses.

Alistair Darling: No, the fee was calculated taking into account RBS's position and the assets that were put forward. That was the basis on which it was calculated and we will approach the other banks in exactly the same way.

Alistair Darling: First, I will happily pass on the hon. Gentleman's name to the new chief executive of the bank and see whether he can re-employ him. Secondly, and rather more seriously— [ Interruption. ] I am glad that the right hon. Member for West Derbyshire (Mr. McLoughlin) is thinking of the health of RBS. In relation to the hon. Gentleman's general point, the Government have to intervene and make it possible for there to be more lending precisely because if, left to their own devices, banks stop lending to individuals and businesses, that would simply make the present difficult situation far more difficult. That is why my argument is that doing nothing not only does not work, but is damaging to our future prospects.

Lynne Jones: I share concerns about socialising losses and privatising gain, but whatever means are used to back the banks and private financial institutions with public money, I think everybody is agreed that it is necessary. Given that situation, my question is: why are the Government still relying on commercial loans to secure investment in public-sector infrastructure projects and public services such as the Royal Mail? Should we not cut out the middle man?

Alistair Darling: On PFI projects, I hope that we will shortly be able to publish proposals that will take account of the difficulties about funding that my hon. Friend referred to. On her more general point, I believe that a combination of the public and private sectors working together, whether it be for the provision of finance or elsewhere, is a good thing. That applies to the Royal Mail, too, as it needs more money to help it modernise and improve. That is why I think bringing in private capital to work alongside the public sector is a very good thing.

Andrew Robathan: I guess this banking crisis and the recession are the most important issues facing the country and Parliament today. I do not know whether the Chancellor noticed while he was making his statement that there were only about a dozen Government Back Benchers behind him and three times that number on these Opposition Benches for a party half the size. To what does he ascribe that? Does he think that it is because Government supporters are not interested or are idle, or does he think that Government Back Benchers have, like the rest of the country, lost confidence in him and his Government?

Alistair Darling: The hon. Gentleman is right that the banking problem is the most important that we face at the moment, so I am surprised that he did not want to ask a question about it.

Andrew MacKinlay: Does the Chancellor understand that many ordinary people are bewildered and dismayed that, across the Atlantic, there are obligations to fiduciary duties, compliance and due diligence, which are backed up by the sanction of the criminal law? Yet there is an absence here. Unless or until financial institutions, managers and directors know that they could face the law, we will continue to see this recklessness and selfishness enduring. Will my right hon. Friend tell the House that Lloyds TSB and the RBS group are fully co-operating with the United States Justice Department in respect of the documents that were doctored in London in order to get round US sanctions on money for Iran, as the conduits were the RBS group, Amro and Lloyds TSB?

Alistair Darling: I said earlier that the board and UKFI on behalf of the Government are pursuing that matter. On the hon. Gentleman's first point, like him, I have the greatest concern for people at risk of losing their jobs; that is why we have put measures in place to help people back to work. For many years I listened to the hon. Gentleman when he sat on the Government side, so I know that he was consistent—unlike some of those sitting around him—throughout the '80s and '90s in expressing his concern. I share it and I welcome his support for the measures we take to help people back to work.

Michael Jack: The long-term effectiveness of the Chancellor's measures is predicated on growth resuming in the British economy, but his statement referred to the International Monetary Fund's dire assessment of when growth is likely to return. Will the Chancellor confirm whether he still stands by his pre-Budget report, which indicated that growth would resume in the British economy in three months' time?

Alistair Darling: I said at the time of the pre-Budget report that we would set out our next set of forecasts at the time of the Budget. We will do that. The IMF figure I mentioned related to its forecasts for the world economy. Since October, when I published my forecasts—they were broadly in line with those prevailing at that time—there has, of course, been a very sharp downturn in economies here and across the world. The latest IMF world forecast reflects that.

Philip Dunne: We have just heard announced today, so far as I am aware, the largest commitment by any Government of this country at any time in history to an individual entity. The material provided with this information, as so often with this Government, is woefully short of detail. Will the Chancellor confirm two individual aspects of the statement? First, what level of certainty has he reached with the Royal Bank of Scotland that its assets—the £325 billion-worth of assets that will go into this scheme—have been agreed with the Government? RBS has just concluded a conference call with investors, confirming that in its perspective, the total quantum of assets of individual assets included in the scheme has not yet been finalised with the Government. Secondly, will he confirm whether any of those assets include non-performing assets? When will he provide detail on the level of the non-performing assets that the Government are prepared to take into this scheme?

Peter Bone: On the losses that RBS announced today, will it be able to throw those losses back and reclaim previously paid corporation tax, which may be billions of pounds of taxpayers' money?

Alistair Darling: Even by the hon. Gentleman's standards, that is a particularly silly remark. We are taking this action because it is necessary to do so. Indeed, even his own party's Front Benchers have grudgingly admitted that. It simply is not possible to walk away from the problem—to wish it was not there and pretend that it has not happened. There is a problem, not just here but in other countries, and not just with RBS but with banks across the world. We need to do something about it; otherwise we will not get lending going again. If we do not get lending going again, the recession will be longer and more painful than would otherwise be the case. That is what the hon. Gentleman ought to reflect on.

Nicholas Soames: On the Chancellor's answer to my hon. Friend the Member for Ludlow (Mr. Dunne), is the Chancellor clear and satisfied that he has been made aware by RBS, sector by sector, of the scale of the loans advanced by RBS that are now underwater?

Alistair Darling: As I said in my statement and in answers to questions on it, the Treasury and its outside advisers have looked in some detail at the assets that RBS have offered and have asked to have insured. As I said to the House earlier, one of our difficulties is in trying to value such assets at a time when conditions are deteriorating. We are taking action against a background that is not static; it is moving all the time. We have made every effort to ensure that those assets have been properly looked at and properly valued.

Harriet Harman: With permission, I should like to make a statement about the business for next week:
	Monday 2 March—Conclusion of remaining stages of the Political Parties and Elections Bill.
	Tuesday 3 March—Motion to approve the draft Prevention of Terrorism Act 2005 (Continuance in force of Sections 1 to 9) Order 2009, followed by remaining stages of the Corporation Tax Bill, followed by motions to nominate Members of regional Select Committees, followed by motions relating to the Committee on Members' Allowances.
	Wednesday 4 March—Consideration of an allocation of time motion, followed by all stages of the Northern Ireland Bill.
	Thursday 5 March—General debate on supporting women and families through the downturn and building a strong and fair economy for the future.
	Friday 6 March—Private Members' Bills.
	The provisional business for the week commencing 9 March will include:
	Monday 9 March—Estimates (2nd allocated day). There will be a debate on the work of the Department for Business, Enterprise and Regulatory Reform in the current economic situation, followed by a debate on railways. Details will be given in the  Official Report .
	 [T he details are as follows: Delivering a sustainable railway: a 30-year strategy for the railways? (10th  Report  of Session 2007-08 from the Transport Committee, HC 219; Government response— e ighth special  report, HC 1105); and Departmental Annual Report and scrutiny of the Department for Business Enterprise and Regulatory Reform (14th report from the Business and Enterprise Committee, HC 1116; and Government response Cm 7470) and further Oral Evidence of 16 December, 14 January and 23 February. ]
	At 10 pm the House will be asked to agree all outstanding estimates.
	Tuesday 10 March—Opposition Day (7th allocated day). There will be a debate on an Opposition motion, subject to be announced, followed by proceedings on the Consolidated Fund (Appropriation) Bill.
	Wednesday 11 March—Remaining stages of the Business Rate Supplements Bill, followed by a motion to consider the Penalties for Disorderly Behaviour (Amount of Penalty) (Amendment) Order 2009.
	Thursday 12 March—If necessary, consideration of Lords amendments, followed by a motion to take account of the outstanding reports of the Public Accounts Committee to which the Government have replied. Details will be given in the  Official Report.
	 [The details are as follows: the 30th, the 36th, the 39th to the 41st, the 43rd to the 49th and the 51st and the 57th Reports of the Committee of Public Accounts of Session 2007-08, and of the Treasury Minutes on these Reports (Cm 7493, 7522 and 7545).]
	Friday 13 March—Private Members' Bills.

Harriet Harman: I agree with the hon. Gentleman's comments on the way in which Prime Minister's Question Time was handled yesterday and the suspension of questions. I think that all Members appreciated the opportunity to show their sympathy and support for the Leader of the Opposition and his family.
	The hon. Gentleman asked about the case of Alma Harding. We have all seen press reports. I remind the hon. Gentleman that although we set the law in this House, our constitution requires the law to be applied by the courts and prosecutions to be undertaken independently by the Crown Prosecution Service. I am sure that neither the hon. Gentleman nor the Opposition as a whole would want us, as elected Members, to substitute our judgment— [Interruption.] Would hon. Members allow me to finish the point? We must not substitute our judgment for the independent decision-making process in the Crown Prosecution Service.
	Although the court saw fit to give Mrs. Harding an absolute discharge, according to press reports, it did not take the option that it could have taken and require the CPS to pay her costs. Let me simply say that it is important that we all recognise that we cannot substitute our judgment for that of magistrates and justices of the peace. They hear the evidence, they must decide on the penalty, and they must decide the question of guilt or innocence. That is the appropriate position, and I do not think that the hon. Gentleman should try to make this House a substitute for a court of law.
	We are all anxious to ensure that unwanted, unplanned teenage pregnancies are reduced to as low a level as possible. That is why, in 1999, we introduced a reduction target. Over the 10 years that the strategy has been in effect, there has been a 10 per cent. drop in the rate of teenage pregnancy. I think that, given that no progress was made in the preceding two decades, this has been a decade of welcome progress. However, as the hon. Gentleman rightly recognised, that progress has been uneven around the country. According to a report published today by the Office for National Statistics, local authorities that employ a focused strategy involving everyone working together have made considerable progress, while others have lagged behind. That is why the rate of progress has dipped and now requires further momentum.
	Let me give two examples, from the hon. Gentleman's constituency and mine. In Rutland, there has been a 7 per cent. increase in the teenage pregnancy rate over the past 10 years. I suggest that the hon. Gentleman works with all the authorities in his constituency—health authorities, local authorities and schools—to back up the strategy that he clearly supports. In the London borough of Southwark, which I represent, there has been a 12 per cent. reduction in the—yes, much too high—rate of teenage pregnancy. We must do what we can in all parts of the country, which means giving information to parents on how to talk to their children about these issues, ensuring that there is good sex education in schools, and ensuring that there is good advice on, and accessibility of, contraception.
	The hon. Gentleman asked about the equality legislation, and about maternity pay and leave. As I have said, there will be a debate next week on supporting women and families through the downturn, which will give Members an opportunity to speak and hear more about the role of equality legislation in ensuring fairness and equality for women in the world of work. We will press forward with that legislation.
	I remind the hon. Gentleman that, since 1997, we have increased maternity leave from 40 to 52 weeks. We do not regard that as a burden on business; we regard it as support for families. We have doubled maternity pay from £55 to £117 a week. We do not regard that as a drain on the public purse or a burden on the taxpayer; we regard it as good support for families. Any further measures will be a subject for the Budget, which will be announced on 22 April.
	The hon. Gentleman asked for a further debate on the economy. He will have heard me announce that there would be an estimates day debate on the Department for Business, Enterprise and Regulatory Reform in the current economic situation, which will give Members an opportunity to raise issues of concern such as lending to small businesses, securing jobs, helping those who do face redundancy, and ensuring that we do all that we can to support the housing market.
	The hon. Gentleman asked about port rates. As he will know, a statutory instrument allows businesses more time to pay backdated obligations.

David Heath: In response to the comments of the hon. Member for Rutland and Melton (Alan Duncan) about yesterday's events, let me simply say that I felt that the Prime Minister, the right hon. Member for Richmond, Yorks (Mr. Hague) and my hon. Friend the Member for Twickenham (Dr. Cable) expressed the House's sentiments very well. Any further words on the subject from me would be superfluous.
	We have just heard a very important statement by the Chancellor of the Exchequer on economic affairs. At the same time, the Treasury Committee was hearing evidence from the Governor of the Bank of England. May I suggest to the Leader of the House that that was not good timing and not the best use of the House's time? Of course the statement was important and of course it needed to be made today, but the order of statements prevented Members—including the Chairman of the Treasury Committee—from being present in the Chamber to hear the statement. That strikes me as very unfortunate; perhaps the Leader of the House will look into it.
	While I am talking about financial affairs, I note that 9 March is to be an estimates day. Of course, the one subject that we will not debate on that day is that of the estimates that we will be asked to agree at the end of the session. On 10 March, we are to have what are misleadingly described as "proceedings on the Consolidated Fund (Appropriation) Bill". Precisely what we will not have are proceedings on that Bill, because under Standing Order No. 56 we cannot debate, amend or even vote on it. That, in my view, underlines the failure of the House to undertake properly its scrutiny role in relation to expenditure. We have escalating spending, escalating debt and an escalating contingent liability. Never has so much been spent by a Government with so little scrutiny. There is an urgent need for us to reform our scrutiny of expenditure, as well as the tax arrangements, in the current Parliament.
	Experience shows, sadly, that during a recession there is normally a concomitant increase in crimes such as burglary and theft. May we have a debate on police numbers? The Home Secretary has said that the overall number of police in the country has risen marginally, and she is correct. However, earlier this week the chief constable of Gloucestershire said that in 19 police forces officer numbers had fallen. My own force area, Avon and Somerset, has lost 73 officers in the past year.
	When I was chairman of Avon and Somerset police authority, under a Conservative Home Secretary, I asked for more officers every year and was told that we could not have them. Since then we have seen an increase, but now we are seeing a decrease at exactly the time when we need officers on the beat.
	Lastly, may we have a debate on whether it can ever be justified to have a pension of £650,000 a year—three and a half times the Prime Minister's annual salary, 30 times the salary of the people in the call centres and the telling staff who are being sacked this week from the same organisation, and 140 times the basic state pension? When a public company is involved, can that level of expenditure ever be justified—or is it, as I suspect, corporate theft?

Harriet Harman: A great deal of consideration is given to how we deal with this matter. At the last business questions, I set out the approach in principle that I think we should take. The solution I would propose involves the role of the Speaker, perhaps joining as a party to encourage the court to recognise that it needs to strike out its original judgment. I feel that we have a duty of care to our constituents: that is a duty in our code of conduct. We are accountable: we are accountable to our electors at general elections. We are not accountable to the courts, except in respect of the criminal law, contract law and employment law. The judgment on how we have responded to our constituents is not for the judiciary; it is for every single elector and our constituents.

Philip Davies: May we have a debate on political correctness in the light of the excellent remarks made by the Secretary of State for Communities and Local Government earlier this week, and particularly in relation to schools? Despite the right hon. Lady's speech, they are currently enjoying a lesbian, gay, bisexual, trans-history month, with schools performing "Romeo and Julian". Does the Leader of the Opposition agree that it is better for pupils to learn about "Romeo and Juliet" and Shakespeare than the politically correct "Romeo and Julian", and does she also agree with her right hon. Friend on these matters?

Harriet Harman: I do not regard myself as a Shakespeare expert, but, as far as I can remember, in Shakespearean times boys would play girls and girls would play boys, and the whole point was trying to work out which was which. As far as pressing forward on equality is concerned, there will be a debate next Thursday on new equality legislation, so that we can ensure everybody in this country is treated with fairness and respect and is not subject to prejudice and discrimination—or, indeed, cheap shots from the hon. Gentleman.

Harriet Harman: There is no intention that anything involving public spending should be rubber-stamped. There is scrutiny by Select Committees and the Public Accounts Committee, and there is the scrutiny that follows the Budget. If my hon. Friend has any suggestions on how we can more effectively scrutinise public expenditure—the point raised by the hon. Member for Somerton and Frome—we would certainly be prepared to discuss them. In the first instance, perhaps my hon. Friend the deputy Leader of the House could conduct a discussion, and if anybody wants to contribute to it, they can talk to him. None of us has any interest in anything other than making sure that every pound of taxpayers' money is properly and effectively spent.

Mark Hunter: My constituency is home to the largest clinical unit dealing with anorexics and bulimics in the whole of the north of England, yet the supply of places there is still outstripped by demand. Given the answer that I recently received to a parliamentary question about the increase in the number of young women under the age of 16 suffering from eating disorders—the number has increased by 80 per cent. in the past 10 years—does the Leader of the House not feel that the time has come to debate on why there has been such a drastic increase in these figures and what more can be done to help?

Peter Bottomley: Can the Leader of the House ask the Justice Secretary or the Lord Chancellor's Department to make a written statement on the working of the Legal Services Commission contract payments protocol? Obviously, no one expects a legal aid firm to get every minor variation paid each month, but where the standard monthly payment falls to about one quarter of the money outstanding to a legal aid firm, there ought to be a way of making sure that that payment is made. If the LSC consults the Law Society and the experts in my constituency, Jane Macdougall and Christine Campbell, it will probably find ways to make sure that the rules allow justice to be done. The Government want to make sure that debts are paid. Money is outstanding to good legal firms.

Ann Winterton: May we have a full day's debate on future strategy in Afghanistan—in Government time, not just on the Adjournment of the House on a Thursday—encompassing the present military effort, the lack of air power, the success or otherwise of reconstruction projects and other related matters, so that Members of this House can have a real opportunity to debate the future and the possible political successes or otherwise?

Harriet Harman: It is important that initiatives designed to provide substantive support to our important small business sector at a time of global economic challenge work in practice on the ground for every small business that needs help. About 66,000 small businesses have had their tax deferred and all small businesses benefit in one way or another from the VAT cut and the extra money that has gone into the economy from tax rebates. The need to ensure that loan guarantees are available for reasonable borrowing is one of the reasons we produced the booklet "Real Help now for People, for Business". We have divided that up so that businesses in each region can see what help is available. If the system is not working as intended, that is very significant for the individual who needs help. I will ask the Deputy Leader of the House to take up the case and report back to me and the Secretary of State for Business, Enterprise and Regulatory Reform, so that if an individual case has hit a problem it can be sorted out, or if it illustrates a wider problem, we can deal with it.

Nicholas Winterton: Does the Leader of the House believe that it is appropriate to proceed with the appointment of Members to regional Select Committees at a time of dire financial crisis? That proposal will cost the House of Commons—in other words, the taxpayer—£2 million. I ask her to reconsider whether it is appropriate to proceed with that proposition at this time.
	May I also thank the Leader of the House publicly for saying that we will have a debate on Zimbabwe? I think that I have heard the date on the grapevine, and we are very grateful to her for finding time for a debate on that critical subject.

Crispin Blunt: May I fully associate the Conservative party with the Secretary of State's comments about the deaths of the four soldiers yesterday? It was a black day for the armed forces, and it was particularly sobering for me as my old regiment is shortly to go to Afghanistan. I entirely associate the Conservative party with the comments made by the Secretary of State at the end of his statement, when he made clear the challenge faced by the armed forces on operations overseas in very difficult circumstances.
	I thank the Secretary of State for giving me early sight of the statement and I note that it follows the undertaking in his letter of 17 November to the Chairman of the Defence Committee to answer the questions put to him by the Chairman and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in the sitting he had three weeks earlier with the joint committees. It is a serious concern that there is an underlying charge of complicity with serious abuse of people detained by British forces on operations overseas. Properly, I presume that it is to address that charge that the Secretary of State has decided to come to the Chamber to make an oral statement, and we thank him for treating the issue with the seriousness it deserves.
	Much of the Secretary of State's statement dealt with the transfer of two members of Lashkar-e-Taiba to Afghanistan in 2004 following their capture by British forces and their being handed over to the American forces. I am grateful for his candour on the details uncovered by the review. It is clear—I know that he has had a conversation with the shadow Secretary of State, who is abroad, about this—that this is a specific rather than systemic failure. I also accept that there appears to be no legal or practical alternative to their continued detention, where they have access to the International Committee of the Red Cross and appear to be detained in proper circumstances.
	Will the Secretary of State confirm that his account contradicts the specific assurances given by the then Foreign Secretary to my right hon. Friend the shadow Foreign Secretary on 6 February 2006? It is at the very least unfortunate that both officials and Ministers overlooked the significance of the cases, not least since the issue of rendition was already highly controversial. My hon. Friend the Member for Chichester (Mr. Tyrie) had already formed his all-party group on the issue. The Secretary of State says that in retrospect it is clear to him that the transfer to Afghanistan of the two individuals should have been questioned at the time. What is his explanation for that not being done at any level and not being rediscovered until 1 December 2008?
	I acknowledge the Secretary of State's unreserved apology for overstating by about 1,000 the number of British detainees since 2004. Again, will he provide the House with an explanation for that? I visited the prison facilities in our area of operations with the Defence Committee in early 2004 and I acknowledge that they had been much improved since serious concerns surfaced about operations there in 2003, but in those circumstances I am astonished at the inaccuracy arising from conditions in 2004 and afterwards. Equally, my experience would lead me to accept that the figures for 2003 could only be an estimate.
	Let me turn to our current operations in Afghanistan. What confidence does the Secretary of State have that some of the 254 detainees handed over to the Afghan authorities have not been mistreated or tortured? On what basis does he claim in his letter to the Chairman of the Defence Committee of 17 November 2008 that there is no legal obligation to detainees once they are transferred to another state? Does he acknowledge that a moral obligation exists? Was that not implicit in the memorandum of understanding between the USA, Australia and the UK of March 2003? Why would not that wider obligation also apply between the UK, Iraq and Afghanistan?
	The statement avoids the principal public issue, which is the charge about complicity by UK forces operating in Iraq outside the Multi-national Division (South-East). That is a glaring hole and it must be addressed. I suspect that as Secretary of State he might not be inclined to thank my hon. Friend the Member for Chichester for his dogged persistence on the issue. However, I rather suspect that, as a parliamentarian, the Secretary of State will admire my hon. Friend's achievement in ensuring that the issue remains at the front of parliamentary concern. I hope that the Secretary of State will confirm that for all the difficulty that the statement brings the Government and the embarrassment at procedures that apparently undermine and sometimes disgrace our values, my hon. Friend has done Parliament and our wider values proud by holding the Government to account.
	This is about more than thoroughly indifferent administration. The statement has partly been prompted by the work of my hon. Friend and, not least, by the evidence produced by the former SAS trooper Ben Griffin before he was injuncted by the Government almost exactly a year ago. Let me remind the House of the gravity of the charge. Ben Griffin said:
	"Throughout my time in Iraq I was in no doubt that individuals detained by UKSF and handed over to our American colleagues would be tortured. During my time as member of the US/UK Task Force, three soldiers recounted to me an incident in which they had witnessed the brutal interrogation of two detainees. Partial drowning and an electric cattle prod were used during this interrogation and this amounted to torture. It was the widely held assumption that this would be the fate of any individuals handed over to our America colleagues. My commanding officer at the time expressed his concern to the whole squadron that we were becoming 'the secret police of Baghdad'."
	How is the public interest served by the injunction when Ben Griffin had left the Army over two years earlier and had made numerous public statements on the nature of those operations in 2006, when he left, and on the role of UK forces in detaining Iraqis and other suspects? The injunction did not come until two years later. Surely, given the serious nature of his allegations and the time elapsed since his operational experience, his account should be publicly scrutinised. The Secretary of State must be prepared to answer those charges.
	Exquisite detail about official and ministerial oversight about two men is all very well and it is appreciated, but it sits ill with simply sweeping under the carpet the apparent evidence of direct British service involvement with delivery to gross mistreatment amounting to torture involving hundreds if not thousands of people. The evidence available is that the conduct of American forces has significantly improved since Ben Griffin served in Iraq, but the country is owed an account of what happened. Nothing does more to undermine our fight against terrorism and violence than departing from the rule of law and the values that we seek to defend. That does the terrorists' work for them. Is that not further cause for the Government finally to set up the comprehensive inquiry into Iraq without any further delay?

John Hutton: May I, first, welcome some of the hon. Gentleman's early remarks, although I did not agree with some of the remarks towards the end of his questions? I think that with hindsight and the ability to reflect on them he might well want to say something different at some point in the future.
	I want to pay tribute to all hon. Members, on both sides of the House, who have championed the issue. I agree with the hon. Gentleman about the importance of UK armed forces and HM Government as a whole operating firmly within the framework of the rule of law. These are our values, and we seek to uphold them throughout the world. We have made every effort to do so in operations in Iraq and Afghanistan.
	Let me deal with some of the specific points that the hon. Gentleman mentioned. There is no truth whatsoever in any allegation that British officials were complicit in the abuse of these two individuals. There is no evidence of abuse in relation to these two individuals and I made that very clear in my statement. I was surprised that the hon. Gentleman suggested that that was not the case. There were errors in relation to the records on the two individuals, which largely explains why the approval of the UK was not sought about their transfer in 2004. My understanding is that the records of the US authorities had those two individuals down as detained by US forces, not UK forces, and I think that largely explains the error, but it should not have happened.
	The hon. Gentleman asked me specifically about errors in detainee records in Iraq. The best explanation that I can offer him, because it is the best one I have seen—that has come to me—is that there was significant double counting at the time in respect of records on detainees. We have put that right, and Permanent Joint Headquarters now maintains one central database, which is regularly updated, and we have dealt with that particular problem.
	The hon. Gentleman asked about the legal position of the two detainees. I have to say that it is far from clear. I do not want to opine on the subject of the legality or otherwise of the position of those detainees—I am not in a position to do so—but I strongly welcome the review that the President of the United States recently announced about detention policies across the range of operations in which US forces are engaged. I am sure the whole House will welcome the outcome of that review.
	I am afraid that the hon. Gentleman and I began to part company when he ended his comments with allegations that Ben Griffin has made about abuse. The hon. Gentleman gave the very strong impression that he thought that those allegations were true and correct. There is no evidence to substantiate those allegations. They have been looked at by a very senior serving British Army general, who found no evidence to support them. It is important that the point is re-emphasised; I tried to deal with it in my statement, so I was surprised that the hon. Gentleman raised it in the way he did.
	The hon. Gentleman referred to the injunction against Ben Griffin as though it were some constitutional outrage. Every member of the special forces agrees a confidentiality deal when they sign up, and if the hon. Gentleman ever has the responsibility of standing at the Dispatch Box to deal with such matters he will find that that is for a very good reason: it preserves the safety and security of special forces operations, and it must not and should not be challenged in the way that the hon. Gentleman challenged it. That is a mistake and he will rue the day if that is the view he takes into government, should he be given that opportunity.
	I finalise my comments with this point: we are not sweeping anything under the carpet. The hon. Gentleman implied that today we were somehow sweeping things under the carpet—he used that expression. It is simply not true. We have extended an open hand and an open invitation to people to come forward and confirm those allegations. None has done so.

Nick Harvey: I echo the words of condolence that the Secretary of State rightly gave for those who died yesterday. I thank him for his statement and like him I sympathise with the plight of those who have to make difficult decisions in the chaos of the battlefield.
	The Secretary of State has come to the House today and presented the conclusions as comprehensive. Will he guarantee to the House that every record and every piece of information held by any element of the British Government armed forces, security and secret services and so on has been scrutinised exhaustively and that this is indeed the last word on the matter? At the heart of it is our relationship of trust with the United States. Does he acknowledge that the new Administration in America now acknowledge that things happened in the past that should not have happened, which they are defining as torture, for example, whereas the previous Administration denied that emphatically? Were not most of the assurances on which we are relying in the account the Secretary of State has given us today in fact assurances given by the previous Administration?
	If the memorandum of understanding between us and America, on which we are relying, was as strong as the Secretary of State invites us to believe, how was it so easily pushed to one side in this specific case? Did the British Government really buy the explanation that the US, with hundreds of thousands of personnel out there in its hunt for al-Qaeda operatives in Iraq, did not have a single person in the country who could speak the relevant Pakistani language, and that that amounted to an adequate reason to move the detainees elsewhere? Have we explicitly asked the Americans whether anybody handed over was at any point tortured or water-boarded? What is our policy for our personnel? Are British personnel explicitly told not to be complicit in abduction, rendition or torture?
	Perhaps the most disturbing thing in the statement was the fact that information was available and made available to the then Foreign and Home Secretaries, so in a sense it was missed at the time. Were the lawyers asleep on the job? Did they not come back later and give legal advice? As the temperature on the issue rose, with allegations of extraordinary rendition and the use of Diego Garcia for flights, did no official revisit the information that had been given to Ministers and draw their attention explicitly to it?
	My final point relates to the allegations made a year ago by Ben Griffin. Looking closely at what he said, we see that he was talking about joint operations, with UK and US troops working alongside each other. In the statement today, the Secretary of State gave a detailed account about people who were detained by the British, but later in his statement he said that, in the new arrangements that have existed since 1 January, we have probed with America their arrangements for treating people captured with assistance from UK troops. I ask myself whether there were instances when UK troops actually captured people but from the very word go they were deemed to be held by the Americans. I wonder whether the Secretary of State can reassure me that that is a distinction that does not really exist, because it seems to me that Ben Griffin's allegation may be slightly different from the explanation that the right hon. Gentleman has given today.
	These are very serious issues. The statement raises almost as many questions as it answers. The Secretary of State took the Conservative spokesman to task, saying that the hon. Gentleman might come to rue some of the things he said. I should like the Secretary of State to reassure the House that he is absolutely confident that nothing will come to light subsequently, either from more whistleblowers or investigative journalists, that might cause him or any other Minister in the future to have to come back to the Dispatch Box and acknowledge that we have not had as comprehensive a version of the truth today as he might like to think.

Andrew Dismore: I thank my right hon. Friend for his statement, which is helpful. Can he confirm whether, when the two Lashkar-e-Taiba people were handed over, British forces knew or suspected that they would be held anywhere other than Iraq? Can he confirm that they were not subjected to water-boarding, because we have a very different view of that compared to the Americans? Can he let us know whether we received any intelligence or information from the interrogation of those suspects in Afghanistan?

Andrew Tyrie: Is it the case that, in a number of operations, a small number of US soldiers are attached to British forces, so that subsequent detainees are classified as US detainees from the start? I hope that the Secretary of State will understand that, among the all-party parliamentary group on extraordinary rendition, there is great disappointment that such statements have to be made.
	I began some years ago to make a number of very serious allegations that Diego Garcia had been used for rendition, that armed services were being dragged into that, and that the security services have facilitated rendition. All those allegations were vigorously denied, and all of them have been confirmed in three ministerial statements over the past year and by a High Court judge. Given that all those assurances were baseless, I hope that he can understand that we have less confidence than we did in assurances being made now. Will the Government now agree to instigate a more comprehensive inquiry to bring closure to this sad and sorry business?

John Hutton: I pay tribute to the hon. Gentleman for the honourable and distinguished role that he has played in highlighting these issues, and I have no issue in that regard at all. He raises an important point that goes to the heart of the issue. His question raises a concern about the accuracy of the records that we have been reviewing. I remind him that the two individuals who are in focus were classified in the records as detained by US forces and that that came to light because of the review of all the records where UK and US forces worked together in joint operations. I understand what he says, and I want to reassure him, as far as I am able today, that this has been a very thorough and comprehensive review and that it has got right down to the heart of the issue.

John Hutton: I do not accept my hon. Friend's characterisation of coalition forces as alien invaders. They are working under the very clear authority of a succession of UN Security Council resolutions and have operated for many years in Iraq under the explicit authority of a UN Security Council resolution. Our approach in Afghanistan does not just involve the use of military means, but I do not believe that it will succeed without the use of military means. There is a chronic lack of security in Afghanistan, and we need to correct that, but we are pursuing a range of strategies in Afghanistan to bring about what he and I both want: an end to hostilities and a resumption of peace and democracy in that country.

Paul Murphy: I beg to move,
	That this House has considered the matter of Welsh Affairs.
	Before starting today's debate, I would like to extend, through the hon. Member for Chesham and Amersham (Mrs. Gillan), the thoughts, prayers and sympathies of everyone in Wales, of all political persuasions—I am thinking particularly of Welsh Members of Parliament—to the right hon. Member for Witney (Mr. Cameron) and his family at this difficult time for them.
	You are a serious Welsh lady, Madam Deputy Speaker. Like you, I am glad to be present at this annual Welsh day debate. It is sometimes called the "St. David's day debate", but as Members know the feast day of that saint is Sunday. Today is, in fact, the feast day of St. Isabel of France—rather appropriately, bearing in mind what might happen on the rugby field in Paris tomorrow. I am sure that we all send our best wishes to the Welsh rugby team for tomorrow.
	Each year we take this unique opportunity to debate all that is Welsh. However, this year there is little doubt that our minds have to be focused on the significant economic challenges that all of us collectively face. Wales, along with every country in the world, cannot insulate itself from the worldwide economic problems. No one could have predicted the sheer scale and speed of recent events. This is no ordinary crisis, and it is clearly not the result of the usual cycle of domestic inflationary pressures. It is the first financial crisis of the global age.
	What has changed since the United Kingdom recessions of the '80s and '90s is that it used to be thought that spreading financial risk globally would insure against it. Instead, however, the risk has impacted globally. My right hon. Friend the Chancellor of the Exchequer's statement earlier today has great relevance to that point.
	Since the '80s and '90s, there is no doubt that the Welsh economy has been dramatically transformed. As I look back at last year's debate—as we get older, I suppose that we tend to look back—I remember that I spoke about Wales's record employment, the importance of the knowledge economy and the fact that the Wales of the future will be a small but clever country. The present economic crisis is hitting us hard, but we are starting from stronger foundations than ever before. The financial crisis has caused a world recession, with consequences that are hurting individuals, families and firms right across Wales. Government action on regional, national and international—and, indeed, local—levels is required to intervene and support our economy by helping people and businesses.
	Our decisive action in October, to invest £37 billion to strengthen our banks and stop them collapsing, was vital for our economy—not for the sake of the banks, but, as my right hon. Friend the Chancellor said earlier, for the people and businesses in Wales and around Britain that rely on them. In January, we announced further measures designed to reinforce stability, to increase confidence and capacity in order to get credit flowing again. The pre-Budget report in November additionally provided a £20 billion injection for the economy, including targeted support for small businesses, a temporary reduction in VAT and support for homeowners facing difficulties. We calculate that approximately £1 billion has come to Wales because of that fiscal stimulus.

Lembit �pik: The Secretary of State knows that I am sympathetic to and fairly supportive of the measures that the Government are taking to try to lessen the impact of the economic downturn. Nevertheless, is he aware that many small businessescertainly in Montgomeryshireare experiencing very serious problems because, notwithstanding the Government's investment, the banks are still reducing their overdraft facilities? That means that otherwise viable businesses have to lay off workers and may have to close as a result of the banks' reticence about maintaining lending at pre-recession levels.

Paul Murphy: The hon. Lady is right to ask those questions. I hope that I will be able to give her a bit more detail in the course of the next week or so. As I said, two companies, one in Welshpool and one in Llantrisant, are currently receiving help, and 15 are under consideration. She is right to focus on the automotive industry, which is quite big in my own constituency, where workers have been put on to a three-day week because orders are not coming inpeople are not buying cars, and if they are not buying cars they are not buying brakes. Ultimately, therefore, we need to ensure that manufacturing continues for when the good time comes.
	On the financing of the scheme

Philip Dunne: The Secretary of State has been regaling the Chamber with the work that the Government are doing to try to help preserve jobs for private sector entities, but would he reassure the House that he has put in the maximum effort on Government-owned agencies? I am thinking of the Nuclear Decommissioning Authority, which has been determined to press ahead with the closure of the Wylfa nuclear plant, despite the vigorous efforts of the local MP, the hon. Member for Ynys Mn (Albert Owen), who is in his place. He has tried to intervene with the Secretary of State to keep that power plant going to preserve jobs in the area.

Paul Murphy: I cannot give a reassurance about rumours, but I will certainly take the issue up with my right hon. Friend the Secretary of State for Transport and find out whether there is any truth in what is obviously going around the town of Chepstow. That is the first I have heard of it, but I will certainly take it up.

Adam Price: The generosity of the Secretary of State knows no bounds. I think that almost everyone has intervened now.
	The Secretary of State mentioned the importance of the economic summit. I was wondering what plans there are for members of the board of United Kingdom Financial Investments, which holds the Government's stake in the partly nationalised banks, to come to Wales to hear the experiences of businesses there. There are examples in my constituencyand I am sure that this is true for other hon. Membersof businesses that have been badly treated by banks in which the Government have a stake. Could representatives of UKFI come to hear first-hand the experiences of businesses in Wales?

Paul Murphy: That is a very good idea, and I will certainly follow it through. The Deputy First Minister in Wales, with whom the hon. Gentleman has some connection, was talking to me only last week about getting the heads of the banks in Wales to come together to talk about banking practices and other issues raised by hon. Members, and I shall take that point up.

Paul Murphy: The Under-Secretary of State for Wales, my hon. Friend the Member for Caerphilly (Mr. David) will give more detail to the House when he makes his winding-up speech. I do not want to give information that is inaccurate in any sense, so I shall make sure that my hon. Friend deals with it in that speech.
	I have two other things to mention as far as the economy is concerned. The first is the announcement by RWE npower of plans to treble the size of their carbon capture pilot project at Aberthaw from 1 MW to 3 MW. Subject to planning permission, the construction of the 8.4 million project will begin later this year, with plans for the pilot to be fully operational by 2010. That is good news for us in Wales. It is the first pilot plant in the United Kingdom to capture carbon dioxide direct from a commercially operating power station. It will also provide a boost to the local economy, and given that the economy of our country is historically based on coal, it is excellent news for us.
	The other issue I wanted to mention, given that my hon. Friend the Member for Aberavon (Dr. Francis) is in his place, is the important work that his Committee did on globalisation. Everybody should read the report in question, and I would like to draw one part of it to the attention of the House:
	In the course of this inquiry, we have collected numerous examples of innovative practice in Wales, spanning the full range of economic sectors. These examples demonstrate that, despite the present difficulties, Wales does have the essential ingredients necessary to face the challenges of globalisation.
	That message from my hon. Friend's Committee is a very good one.

Paul Murphy: That is excellent news, and I congratulate my hon. Friend on that news for his constituency and his constituents. It is good to hear about such events.
	I turn to another important issue that the Select Committee on Welsh Affairs is dealing with, which is the Welsh language legislative competence order. I have presented the proposed Welsh language order to Parliament for pre-legislative scrutiny, and I hope that everybody will urge their constituents to have their say on the proposals. I want to see the biggest public debate on the Welsh language of recent years, and to hear from all sectors of society in Walesthe public sector, business, the voluntary sector and the general publicto ensure that the draft order meets the needs of the people of Wales.
	When the order was published some weeks ago, some people thought that I was somewhat lukewarm on the issue of the Welsh language LCO. Indeed, this was referred to in Mr. Vaughan Roderick's blog, which is of course written in Welsh, but it has been translated for me because we have a very good Welsh language scheme in the Wales Office. In it he says:
	Paul Murphy's press release on the Welsh language LCO was rather lukewarm. He said more consultation was needed and that the order could change. To use his words, 'it is not set in stone.'
	Apparently, some Labour Assembly Members were amazed by the release, but it is not the Secretary of State that is to blame:
	Don Touhig is the problem. One said, 'Don is Paul's best friend, and they spend a lot of their spare time in each other's company, and with their families, and they go on holiday together like brothers.
	So what I have to say on the Welsh language order is all the fault of my right hon. Friend the Member for Islwyn (Mr. Touhig).
	In reality, we have come a great distance in the past 20 or 30 years on the Welsh language in Wales. When I was a lad, no one was taught Welsh in Gwentit was not on the curriculum. In my constituency today, I have three Welsh medium schools: one secondary and two primary. Every child in Wales, and in my constituency, is taught Welsh. The best way to develop an interest in, and the challenge for, the Welsh language is for people to learn it, and for them to be taught it. The best way forward, as with everything else in this regard, is to move forward by consensus. There should be a consensus among the people of Wales that we have a sensible way forward, and we should give the Welsh language an opportunity to flourish, which of course it should.
	By asking people in Wales their views on the Welsh language order, we are giving them the opportunity to express their views on a detailed document, on which this House will eventually have to decide to vote. It will do two things. It will give the opportunity to all peopleparticularly those affected by the orderto make their views known, and it will also mean that we can explain to people and reassure them about what is not in the Welsh language order. Some of the mixed correspondence that we are all getting does not reflect what is likely to be in the order. It is a draft order, which means that the Welsh Affairs Committee, chaired by my hon. Friend the Member for Aberavon, will have a proper opportunity to examine it. In doing so, it will talk to people in Wales who are involved in the matter. The Assembly itself will be able to do exactly the same thing. I have sent letters today to public bodies and others in Wales, and I will share any results of the consultation with the House and with our colleagues in the Assembly, so that we can come to a proper decision.

Paul Murphy: Government Departments, of course, do have the opportunity to comment upon legislation. The BBC will submit a view through BBC Wales, and if it wants to comment on effects on business or broadcasting across the border, there will certainly be an opportunity. Ultimately, the consultation is about listening to people and ensuring that when we eventually introduce the order, it is watertight, means what it says and is the result of the most widespread public debate possible in Wales. That is very important.

David Davies: Is not the real problem that no matter what goes into the final order, the Welsh Assembly will end up with the power to make legislation on the Welsh language, and there will be no input in that from Members of this House?

Paul Murphy: The order will define the parameters of what the Welsh Assembly is able to legislate on. It will stategiving considerable detail, unlike a lot of legislationprecisely what such future legislation can deal with. The establishment of a Welsh language commissioner is one example, and it is generally supported. I suspect that we will get the most letters on the issues that affect business. However, as I said earlier, the idea that a small corner shop or a small business will be affected is wrong. Certain matters might need closer and tighter definition so that we do not capture people who are not intended to be covered by the order.
	A lot of the bodies mentioned in the LCO already have sophisticated Welsh language schemes, so it will almost rubber-stamp what they already do. Nevertheless, if there are genuine concerns about aspects of the order, whether from business or the public, there will be an opportunity for people to make their views known. I very much welcome that.
	Importantly, individual Members of Parliament and of the Assembly can also hold their own consultative processes. For example, I see from yesterday's  Daily Post that Lesley Griffiths, the Assembly Member for Wrexham, has invited people to have their say on the Welsh language and write to her in her role as a member of the Legislation Committee. That is the right thing to do, and people throughout Wales will have the opportunity to discuss the legislation.
	The partnership that I mentioned earlier is very important for the people of Wales. Interestingly, the British-Irish Council met last Thursday and Friday in Cardiff, and we were able to share best practice in all parts of the UK and Ireland. For example, the Assembly Government pioneered the creation of a Children's Commissioner and free bus travel for the over-60s, to which I am now happily entitled. We have copied those things in England. Wales has learned from the experience of England how to reduce waiting times for hospital treatment, among other things.
	Ultimately, we serve the same people. Today, our annual opportunity to discuss Welsh matters enables us to ensure that together, we serve the people whom we represent, whether we sit on a local authority, in the Assembly or in this House. We can ensure that the people of Wales are more prosperous as a result of the joint policies of both our Parliaments.

Cheryl Gillan: First, I thank the Secretary of State for his kind words to David and Samantha Cameron and their family on the death of their son, Ivan. We all share his thoughts, and David will be able to see that the Secretary of State speaks on behalf of Wales in passing on those best wishes to him on this sad occasion.
	I apologise to the Under-Secretary of State for Wales; sadly, I will not be here for his winding-up speech and his exchange with my hon. Friend the Member for Clwyd, West (Mr. Jones). I mean no discourtesy; my timetable has become a little hectic today, and I will be on my way to Wales when he addresses the House.
	I should like to continue in the spirit in which the Secretary of State opened this St. David's day debate. Since we last celebrated St. David's day, some things have not changed in Wales. First, the brave men and women of our armed services are still defending our interests abroad. My hon. Friend the Member for Aldershot (Mr. Howarth) will be visiting the Welsh Guards based in his constituency, who I understand will shortly depart for Afghanistan. I am sure that, on St. David's day, all our thoughts are with them and their families. All our thanks go to the Welsh men and women who are serving our country so bravely abroad in our armed services.
	I am delighted that we have something else that has not changeda rugby team on the rise, with the prospect of a second consecutive grand slam. I am delighted that the hon. Member for Ynys Mn (Albert Owen) has new baking facilities in his constituency and brand new jobs. I hope that they are not making French breadas the Secretary of State said, I hope that they are making Welsh cakes instead. We have had another set of elections since the last St. David's day, and I am pleased to say that yet more people in Wales chose to vote Conservative as they sought change at the ballot box.
	The Secretary of State is right, however, that what has changed dramatically is the economic outlook. We have not compared notes, but I think that he will find that my speech takes the same shape as his, with remarks on the economy in Wales followed by remarks about the Welsh language order. Some 28,000 more people have lost their jobs, and we now have more than 100,000 people out of work. Many thousands of 16 to 24-year-olds are not in work, education or training, which is exceedingly worrying. A significant number of businesses both large and small have closed, and sadly house repossessions are rising. Although that is clearly not confined to Wales, or even to the United Kingdom, the effect on Wales, as the poorest region of the UK, is especially great.
	The first priority must be to help families and businesses in the short term. We would like taxes to be cut for savers and pensioners, a bold and straightforward national loan guarantee scheme to get credit flowing, a reduction in employment costs for small businesses, tax breaks for new jobs and a six-month delay in VAT bills to help small businesses with their cash flow. We believe that such practical measures could help our beleaguered economy.
	The Real help now list, which the Secretary of State produced with the Assembly Government, sets out various measures and schemes that the Government have established. Of course, the Secretary of State also referred to his summits. However, the documents and the meetings, although they are well intentioned and establish a plan, do not appear to save many jobs or halt business closures at the moment. Today, the Government are putting many more billions of pounds into our banking system, and that is hard news for businesses that are closing and those whose jobs are threatened in Wales.
	As has been said time and again, a credit crunch can be truly tackled only by addressing the problems of credit and getting money flowing to the business front, instead of the current sclerotic position, whereby nothing moves to help businesses. A bold loan guarantee scheme, such as that suggested by my right hon. Friend the Member for Witney (Mr. Cameron), would be welcomed throughout the country. While we tinker at the edge of the problems with so many of the schemes in Real help now, large sums go into the banking system, and the bankers appear to sit back in relative comfort, without apologising for their part in our economy's downfall.

Cheryl Gillan: The right hon. Gentleman obviously has more time on his hands than I have. What with preparing for the debate, for a television programme on which we will both appear later today and my private Member's Bill on autism, I have not had time to scan the papers. However, I am sure that the right hon. Gentleman remembers the remarks that some foreign politicians made about Labour Front Benchers, which I am too much of a lady to repeat.
	After prioritising help and removing the blocks on lending, I am sure that the Secretary of State agrees that we have a duty to look long term to ensure that Wales can emerge from the recession with the tools to flourish and prosper. To do that, we must make some major fundamental strategic plans rather than going for quick fixes or cheap headlines.
	Wales has fantastic natural assets and an enthusiastic and committed work force, as we all know. We must make the most of our assets and transform Wales into a country to which people can flock once again to do business and take their well earned holidays. I want to consider some matters to which we need to give genuine attention to give Wales that competitive edge.

Cheryl Gillan: The hon. Gentleman does not need my endorsement about accountants' fees for dealing with bankruptcies or receivershipshe has made the point himself. He will know, however, that there is an awful lot of such business, so those firms will be making good profits.
	I want to deal with those things that will give Wales a competitive edge when the country emerges from recession, as it will. As the Secretary of State knows, we should have such a debate between Westminster and Cardiff bay, because it is essential for the health and welfare of the Welsh economy that we co-operate at both ends of the legislative spectrum, as it were. We need to prepare Wales for the upturn.
	Let me deal first with transport. If Wales is to attract further investment, whether domestic or overseas, businesses must not feel isolated from other parts of Wales and the UK or from Europe or beyond. The journey from north to south Wales is still a great undertaking. The journey from Bangor to Cardiff by rail still takes more than four hours, which is almost an hour longer than it takes from Bangor to London. Although we must acknowledge the obvious geographical constraints, we must have long-term plans to increase accessibility to and from Wales and within Wales.
	With increased line speed, the rail freight network along the M4 corridor could carry more volume if more goods came in through Welsh ports. The ports deserve support. I am particularly concernedperhaps the Minister could deal with this when he winds upnot only by the Government's decision to recalculate, and thus effectively to raise, port taxes, but that this should be done retrospectively. That will place an added burden on a crucial part of the Welsh economy. Our road, rail, maritime and air links must all be maintained and enhanced to provide those valuable links to the worldwide market.
	As geography makes travel within Wales more arduous, it is vital that modern technology and infrastructure should help to compensate. Broadband coverage and speed need some attention, as I am sure the Secretary of State knows. At present we do not have 100 per cent. coverage, and the prominent not spots in mid-Wales effectively isolate those rural communities, in terms of modern business potential. The Government recently said that they wanted every home to have access to broadband at 2 megabytes a second at least by 2012. However, with average connection speeds of 2.9 megabytes a second in parts of Wales already and with technology being developed with much greater speeds in mind, we need to set our sights higher to give us the competitive edge. That will be crucial in Wales if we are to attract inward investment and stimulate business development in areas such as rural mid-Wales. I understand that the Secretary of State has responsibility for digital inclusion, so I hope that he will be able to give Wales the edge in speed and infrastructure that would help us to secure our future businesses and give us those first-class electronic links.
	Energy is another thing that we must consider. I welcome the Aberthaw announcement today. The strategy is critical in terms of both security and its impact on the local economy and the environment. The power station at Milford Haven is welcome. I have sung the praises of the liquefied natural gas pipeline linking Milford Haven on many occasions. That pipeline was delivered on time and on budget, and I am still so proud of it as a piece of British engineering, because it will contribute hugely to our energy security.

Cheryl Gillan: I will come to that in just a second. Before I do so, let me say that we need an energy strategy that reflects Wales's potential, which will include looking at the short list of options for the Severn barrage that have been announced. Any barrage, as we all know, will have positive and negative effects in respect of energy production and environmental impact. We need a rapid evaluation process, because there is no doubt about the potential. We have been talking about the barrage for an awfully long time without finding out exactly what should be done to capture renewables through the resources provided by the River Severn.

Cheryl Gillan: No, I do not agree. I have flown along the pipeline and have met and talked to the chief engineer. I was exceedingly impressed by the amount of repair work and by the care that was taken with the environment. There were some absolutely stunning pieces of engineering in and around rivers and other areas of sensitivity. Some heavy negotiations had to be undertaken with a large number of landowners before the pipeline could extend across its route. I think that the hon. Gentleman will acknowledge that anyone going anywhere near the pipeline cannot see it in many places. I therefore do not agree with the hon. Gentleman to that extent, but I have to say that no project should go ahead without an attempt to minimise its environmental impacts in every possible way. If Wales is to remain competitive, we must have a strategic energy policy.

Cheryl Gillan: If the hon. Gentleman will forgive me, I should like to make a little progress. I am sure that he will make his own speech, and will press the case for a project that he has championed relentlessly. I should like to hear from the Minister what progress is being made on it.
	While preparing people and the business environment for the recovery, we must also ensure that we do not erect barrierstariff or non-tariffto new ventures.
	It is essential that we examine the recently published Welsh language legislative competence order to which the Secretary of State referred, and which is a matter of concern to some businesses in Wales. Conservatives have a proud record on the Welsh language, and are committed to its growth. Every piece of legislation that has strengthened the language has been Conservative-led, including Lord Roberts's excellent Welsh Language Act 1993. Many businesses are already making enormous strides to provide information in Welsh, and we must encourage those efforts through a culture of shared responsibility rather than heavy-handed bureaucracy. We must ensure that the devil is not in the detail of the LCO, which should be examined closely both across the House and, as the Secretary of State reaffirmed, more widely.
	Some may question our callI think it is a joint callfor closer scrutiny of the order, but we must ensure that there are no unnecessary burdens on business, and that the good will towards the language is maintained at this time of enormous economic difficulty. We must put the interests of the people and businesses in Walesespecially in these tough economic timesat the heart of any decisions on linguistic policy.
	I am also concerned about the way in which the LCO will be scrutinised. I hope that the Secretary of State will devote some of his time to examining the way in which the scrutiny process will develop. There is some concern about the possibility that the House and the Welsh Affairs Committee will start to scrutinise the order while recommendations for change are being made in the Assembly. I hope to have a meeting with the Secretary of State to discuss whether, instead of conducting our investigations in parallel, we could conduct them sequentially, so that we can be sure that the document being examined by the Select Committee here is the one recommended by the Welsh Assembly Government.
	Transport, education, energy, electronic communications, tourism and, perhaps most of all, not creating unnecessary barriers or burdens for business should help to position Wales for the upturn. We share a common aim in wanting to help families and businesses in Wales to come through the current financial difficulties. I hope that the Secretary of State will work closely with the Welsh Assembly Government and with his colleagues to ensure that Wales is in the best possible position to take advantage of the upturn when it comes. We need forward thinking and strategic planning. I think that by looking at our longer-term goals as well as dealing with our short-term problems we can ensure that Wales comes through these difficult times with the means to succeed in the future.
	I want to end on a positive note for St. David's day. I think we in Wales will have our we can do moment: I believe that our businesses and people can work hard, and that we can create the right climate for inward investmentand I look forward to having the opportunity, on another occasion, of being able to read out all the job gains and inward investment coming into Wales, rather than having to spend time concentrating on the job losses and the businesses that have gone.

Mr. Deputy Speaker: Order. Before I call the next Member to speak, may I remind the House that Mr. Speaker has placed a 12-minute limit on Back-Bench speeches, and that that starts now?

Hywel Francis: I wish to make a contribution to this debate from two perspectives: that of an individual Memberfor Aberavonand that of Chair of the Welsh Affairs Committee. The perspectives and priorities are much the same, as outlined by my right hon. Friend the Secretary of State for Wales, and they are clearly about the economy, both locally and globally; nothing is more important to the people of Wales.
	In my constituency, manufacturing is the dominant sector, and in particular steel. In my roles as a member of the all-party steel and cast metal group and secretary of the steel union community parliamentary group in this House, I have had regular meetings with Ministers, unions and Corus, as well as my local authority. I have been impressed by the fact that there is a universal desire to retain both the steel industry and, equally importantly, the skills within that industry. I particularly congratulate the Welsh Assembly Government and the Secretary of State for Wales on the work they have done through the Welsh economic summits, and, more widely, the steps they have taken to establish the ProAct and ReAct initiatives. I am also looking forward to the local economic summit that will be launched in Neath-Port Talbot very soon, and I know that similar initiatives are taking place across Wales, which is most welcome; my hon. Friend the Member for Ynys Mn (Albert Owen) is taking a leading role in his local economic summit.
	In the course of evaluating the impact of the economic downturn on my constituency, I have visited several small businesses. I recently met the management and work force at two important small companies: Excel and Rhino Engineering. They are both cutting-edge manufacturing companies which are very appreciative of the information and guidance being provided by the Government, and particularly the circular letter that the Secretary of State for Wales recently sent to Members, copies of which have been passed on to many businesses in my constituency. The two companies have also benefited from significant contracts for the 2012 Olympics and Paralympics to be held in London.
	Looking cautiously to the future, I have been struck by Tata's continued expressions of support for local communities in my constituency and the backing it has given to the Corus steel plant, as well as by the fact that it is seriously examining the possibility of developing the new Margam drift mine, which, as one would expect, has strong support from the National Union of Mineworkers and other local unions.
	Again looking to the future, it is encouraging that employers' organisations such a the EEF and UK Steel and unions such as Community are looking beyond the current difficult circumstances, talking up the need for greening the economy, what they call a nuclear renaissance and its links to steel, and ultra-low carbon steel-making, turning theory into what they call practical reality.
	Turning to the work of the Welsh Affairs Committee, which I have the privilege of chairing, I should at the outset pay tribute to all its members and staff for their sterling work over the past year. Its workload has virtually doubled in the recent period, and I am pleased to announce today that over the past year, we have succeeded in getting significant improvement in staff support to take account of this increased workload.
	Our annual report, which will be published tomorrow, outlines the growth and range of our activities. The Committee's profile has also been raised both here in Westminster and in Wales, and on balance, we should welcome that. One kindly journalist compared my Committee to that benign institution the Commonwealth games. One Assembly Member generously suggested that we should serve on only one Select, or any, Committeeon just our own Committeewhich I found very helpful.
	One hon. Member, a great supporter of our Committee and one-time member of itthe hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), to whom I sent a message earlier today; I understand that he is on his way to Cardiffgave some advice on how I should run my Committee. He suggested that I should crack the whip. I am grateful for his advice, but that is not my style and I do not think it the style of any Chairman of a Select Committee. We work by consensus and consenta more inclusive approach. Ours is not the style or the language of the slave driver.

Hywel Francis: I am sure that the hon. Gentleman will read the account of what my hon. Friend has just said. We have had an interesting discussion about the matter, and I reported that to my Committee.
	Although in some quarters we may be approaching the notoriety of the committee of public safety of revolutionary France, I am more of a Gramsci than a Robespierre, although I think that Robespierre had his merits.
	The work of the Committee in the past year has focused, as it will in the coming period, directly or indirectly on the economy in recognising the need for an outward-looking, global Wales, rather than a fortress Wales.

Hywel Francis: We have made some observations on that matter. We have not done anything about roundabouts in Shrewsbury, but I am sure that we will come to that issue as well.
	The message of the two reports was very clear. With all due respect to the importance of widening accessI spent a quarter of a century in universities trying to achieve thatthe whole question of student finance pales into insignificance when we are dealing with the core question of the funding of universities for proper teaching and research. Unless that question is addressed, we will not be able to build the knowledge economy of the future and thus safeguard quality jobs for all our communities.
	We made several key recommendations, especially on science policy and research, which can be influenced by the Welsh-UK Government partnership. I hope that we will be able to emphasise that in the future. I am delighted that my right hon. Friend the Secretary of State for Innovation, Universities and Skills has recently visited Cardiff university, and he has agreed to come to my constituency in the autumn to visit Glamorgan university's hydrogen centre and Swansea university's Technium centre and new science campus, which will be based largely in my constituency.
	On the theme of the knowledge economy and creating new, sustainable jobs for the future, my Committee has begun its inquiry on digital inclusion, and we will visit Bangor university to see how higher education is addressing the social and economic challenges facing us. We may also need to consider seriously the role of broadcasting within that inquiry, given the impact of digitisation on the Welsh economy and the democratic deficit. Lord Carter's interim report, Digital Britain, which was published in January, is a matter of concern for us all, not least because as a reserved matter broadcasting is a concern for my Committee.
	Finally, I shall turn to my Committee's new responsibility to undertake pre-legislative scrutiny of LCOs emanating from the Welsh Assembly Government. After 18 months of hard work and much learning by everyone, we have established a pattern of work that is now working reasonably well. We have excellent working relationships with Welsh Assembly Government Ministers, Assembly Committees and the Wales OfficeI see a wry smile on the faces of the two Ministers on the Front Bench.
	We are about to undertake work on two important LCOs, and I am somewhat dismayed that so far no mention has been made of an important LCO on carers. It is to the credit of the Welsh Assembly Government and the Assembly Member for Llanelli, Helen Mary Jones, who initiated this particular LCO, that this is coming before us. We should recognise and respect the right of the Welsh Assembly Government to prioritise its policies and propose legislation. This particular LCOI declare an interest as a vice-president of Carers UK and the sponsor of the Carers (Equal Opportunities) Act 2004will affect nearly 1 million people in Wales, so it is a matter of some consequence.
	I have said publicly, and will repeat, that we will undertake our work thoroughly and, in the words of Erskine May, in an expeditious manner and in partnership with our colleagues in the Assembly. I have already had meetings with Dr. Dai Lloyd, the Assembly Member whose committee deals with the carers' LCO, and with Mr. Mark Isherwood, the Assembly Member whose committee deals with the Welsh language LCO. At five o'clock this afternoon, I will have a meeting with the Culture Minister, Mr. Alun Ffred Jones, and in a few weeks I shall meet Meri Hughes, the chair of the Welsh Language Board. I am delighted to announce that, on the same day, she will also be prepared to meet all Welsh MPs here in the House.
	As an indication

Mark Williams: Thank you, Mr. Deputy Speaker. May I begin by associating Liberal Democrat Members with the profound comments that we heard from the Secretary of State and the shadow Secretary of State on the loss of Ivan Cameron? All of us, and especially those of us who are parents, will appreciate that there is nothing more sorrowful than the loss of a child in such sad circumstances. Our condolences go to the Leader of the Opposition and his family.
	It is a privilege to follow the hon. Member for Aberavon (Dr. Francis). I say this as an Opposition MP, but he is an excellent Chairman of our Select Committee and his pursuit of a consensual style is to be admired. I shall add to what he and the Secretary of State have said about the ingredients for the future and especially the importance of higher education and the skills agenda. We need to develop the Welsh skills base, so that businesses both large and small are supported. In particular, I shall speak from a rural perspective about small businesses.
	As we have heard, the report on the cross-border provision of higher education identified some of the positive steps that have been taken. However, it also alerted us to some of the great issues of concern, the clearest and starkest of which is the funding gap of some 61 million. The House does not need to be reminded that Wales has some of the finest academic institutions in the world, but if the present level of funding is not maintained or increased, there is a great danger that we will fall behind in an increasingly challenging global market. That would make it more difficult for Welsh institutions to compete for research funding which, considering our relative size, is already disproportionately low. A lack of research funding will inevitably make it more challenging for Welsh universities to keep top academics, and the knock-on effect will be that it will be harder to attract new students.
	Moreover, we have to compete internationally as well as in the UK context. The Committee took evidence from Professor Merfyn Jones of Bangor university, who pointed out that international students contribute well over 100 million annually to the Welsh economy through the payment of fees and through spending their money locally. Concerns have been raised with me, most recently by the vice-chancellor of Aberystwyth university, about the mismatch between the length of visas and the duration of some of the courses that overseas students wish to undertake.
	I do not mean to patronise the Welsh Assembly Government in any way, but our report found that, in developing the work force development fund, they could learn some lessons from Train to Gain. It was felt that Train to Gain was far better at promoting itself than the work force development fund. We took evidence from Summit Skills, the sector skills council for the building services and engineering sector, and were told that many employers simply did not know that the work force development plan existedthe Welsh Assembly Government had not advertised it at all.
	The Leitch review has demonstrated the importance to the future skills base of reskilling and upskilling. Learning is a lifelong process now, and not something that happens only between the ages of four and 16. In that context, I know that the Welsh Assembly Government will assertI mean no criticism, as we have heard the same assertions from the Secretary of Statethat 68 million has been spent on the ReAct and ProAct schemes. That is welcome but, like the hon. Member for Chesham and Amersham (Mrs. Gillan), I find it hard to reconcile that with the 7 per cent. cuts that have been made in further education in Wales. As one of my colleagues in the National Assembly, Jenny Randerson, remarked, we should no doubt praise the admirable further education college in the north-east that is now in receipt of 60 million a year, as that is more than the Assembly budget for further education across the entirety of Wales.
	The skills agenda was rightly highlighted when we found ourselves in somewhat uncertain economic climes, but it is now all the more important that we focus and refocus on it. We considered that in our report on globalisation. When the representatives of Higher Education Wales gave evidence to the Select Committee, they stated that higher education contributed 1.6 billion to the Welsh economy, which demonstrates just how important it is. As others have said, we are now moving on from developing the interface between traditional academia in our universities and opportunities in the commercial world. Examples of that are the relationship between Aberystwyth university and Bangor university, the growing associations between the other higher education institutions in Wales, and the merger of the Institute of Grassland and Environmental Research and Aberystwyth university to form the Institute of Biological, Environmental and Rural Sciences. The Under-Secretary of State was there last week and heard about the development of biofuels, the academic scientific research into that development and the need and enthusiasm at IBERS to develop commercial partnerships to take these projects further.
	Of course, that is all underpinned by the state of the national economy. My party certainly supported of the recapitalisation of the banks last October. We share across the House the concern that, since October, 5 billion less has been lent to enterprises across the country. My hon. Friend the Member for Twickenham (Dr. Cable) has made our approach quite clear: we favour the acquisition of ordinary shares so that the Government can have a steer on lending and remuneration. The offensive news that we have heard last night about the 650,000 pension awarded to Fred the Shred, as I think he is called[Hon. Members: Outrageous!] It is outrageous. It does not resonate strongly with what we have heard about the roles of the banks in relation to small businesses and with the difficulties that rural businesses have experienced.
	In my constituency, small businesses account for two thirds of the work force. Indeed, 54.2 per cent. of people in Ceredigion are employed by micro-businessesbusinesses with nine employees or fewer. That is the highest percentage in Wales. When we consider rural businesses, we must make the point that the collapse of small and micro-businesses has a direct effect on the broader rural economy. When young families are forced to move away, that has an effect on the pupil numbers in the village schools and on the ability of public services to continue. That can make the difference to a community's survival.
	I remain very concerned, as we all do, I am sure, about the attitude of the banks. Let me use an illustration that I have been aware of for the past couple of weeks. Two constituents of mineI will not mention their businesscame to Finance Wales in good faith two or three years ago, and achieved funding for their enterprise. Difficulties followed, the cost of bank loans has risen and they are now in negotiation with one of our high street banks to renegotiate the loan. The banks displayed stridency and determination in not budging from a repayment figure of 233 a month, whereas my constituents could raise only 200. That 33 is the difference between the threat of bailiffs hanging over them and their future viability as a business, which would be assured if the bailiffs went away.
	One constituent of mine in the north of Ceredigion has the misfortune of having a range of empty business premises. Although the rate relief has been welcomewe heard about that earlierfor small business people with empty business premises, my constituent will not be helped by the scheme and faces an annual rates bill on empty properties of some 30,000, which directly affects his capacity to function in other areas. That is the reality of the operation of the banks on the ground.
	I have read the Wales Office website in some detail, and have read about some of the schemes available. It states some of the criteria and whether they are applicable to England, Wales or the UK, and gives telephone number contact details. However, there is still a problem in getting that message through to some of our small business people. I really believe that is a problem. Two weeks ago, I went to a small business breakfast in Aberystwyth armed with the website page and went through it with those people. Much of it was fresh news to them, so I do not think the message is getting through to those businesses about the extent of the help available, which they desperately need.

Mark Williams: I thank the hon. Gentleman for that intervention and pay tribute to his work trying to defend the office in Haverfordwest. He makes a valid point. I am amazed at the lack of thought behind the closures, not least in the present climate. All our calls for a moratorium on the closures have been ignored by the Government.
	The hon. Member for Chesham and Amersham (Mrs. Gillan) mentioned broadband. Of course, the answer to HMRC's problem is now broadband, but she mentioned the problems of not spots. Again, I pay tribute to the National Assembly for its work. There are six pilot schemes across Wales, one of which is Cilcennin in my constituency, which will now get some assistance after a long campaign for broadband, but we have a long way to go. All that, in my consituents' context, is taking place in an area that is deemed to need convergence funding for good reason; it is an area of significant social and economic deprivation, as recognised by the National Assembly's communities first programme.
	Let me touch on another rural businessthe family farmand the anxiety that is being expressed, certainly among the farmers in my constituency, about the introduction of the compulsory electronic identification of sheep. Again, I will pay tribute where tribute is due: the Government have had some success in delaying the introduction of that scheme. None the less, EID is looming fast, and there is real anxiety in the countryside. It has been estimatedit is a low estimatethat 18 per cent. of farm income will be lost to the introduction of EID. I remind the House that farm incomes stood at 3,000 in less favoured areasindeed, in most of Walesin 2006-07. That was 63 per cent. down on the previous year, while income on lowland farms was down by 24 per cent. at 8,500.
	I am sure that other colleagues have written to the European Commissioner who is responsible for EID. I was extremely disappointed by her response, which seems to go along the lines not of justifying the system, but of saying that we must proceed just because some countries have started their introduction of the scheme, despite the proven facts that, geographically and climatically, the problems that we have in Wales make the system completely inappropriate. It seems extraordinary that the Commission is not prepared to alter the policy. It may have looked good on paper and ticked various boxes in Brussels, but it has been shown to face significant problems on the ground that will, at best, render it useless and, at worst, seriously undermine the continued viability of small family farms.
	The Government have lobbied on the issue. I pay tribute to Elin Joneswe share a constituencyfor working hard on the issue in the National Assembly, but I urge the Government to continue to push for a derogation and a non-compulsory model. I initiated a Westminster Hall debate on the subject, when there was remarkable unanimity between representatives of my party and other hon. Members. The hon. Members for Ynys Mn (Albert Owen), for Preseli Pembrokeshire (Mr. Crabb), for Meirionnydd Nant Conwy (Mr. Llwyd) and for Clwyd, West (Mr. Jones) were all there. We all argued the same way and sang very much the same tune, yet the scheme is proceeding.
	Of course, the background for todaythe sad realityis the continued funding crisis, whether from banks to small businesses or family farms, or now because of the spectre of a 500 million cut in the National Assembly's budget, made worse by the Barnett formula in all its manifestations. I reflect again on my constituency and I look at the tight local government funding settlement in a county where 40 per cent. of the work force are employed in the public sector. Some people have asserted that those public sector jobs would buffer us from the challenges of the recession, but as I look at NHS schemes, I am less certain that they will proceed. As we mark St. David's day, I look even at a great, iconic institution, the National Library of Wales, which has had a marvellous success with the open-doors policy that has attracted tourists and academics alike to Aberystwyth and the county of Ceredigion, yet because of cuts in its funding, the doors of that august institution will be locked on Saturdays. The Minister has visited the National Library of Wales and has seen some of the excellent work that is being undertaken there, and he will be aware of that dispute.
	HMRC could now alter its interpretation of the rules for claiming back VAT, which will cost the National Assembly 500,000. The hon. Member for Carmarthen, East and Dinefwr (Adam Price) has been involved in that issue as well. Cuts in our budget are in prospect, and that will, no doubt, have implications for service delivery.
	Members may be pleased to hear that I am now turning to my final point; they can rest assured that my hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) will be back on the Front Bench, rather than being a boisterous Back Bencher. On what is nearly its 10th anniversary, I should like to say a little about devolution.
	After nearly 10 years of the Assembly, this debate is as good a time as any to be positive about the contribution made by devolutionalthough I hesitate as I look towards the hon. Member for Preseli Pembrokeshire. Some of us have been frustrated by the operation of the Government of Wales Act 1998. The hon. Member for Caernarfon (Hywel Williams), who is not here this afternoon, talked about the 27 hoops and hurdles that have to be gone through and jumped over before measures can see the light of day in Cardiff. However, legislative competence orders represent progress. Some of us devolutionists passionately believe that anything that can lead to the legitimate transfer of power from this place back to Cardiff should be welcomed. I look forward to the referendum, when the time is right, and I for one am glad that Sir Emyr Jones Parry will not be heading off to Bosnia but concentrating on the work at hand back in Wales. We wait to see what the all-Wales convention will produce when it reports at the end of this year.
	While we have the system, we need to make it work. We have talked about the Welsh language legislative competence order. There are those here who stridently oppose the orderalthough, since the hon. Member for Monmouth (David T.C. Davies) left his place, there have not been as many as there were. I agree with what Front Benchers said about the need for the widest debate, and we have moved on from any assertion that this place should have a monopoly on the debate through the Select Committee. Of course we need the widest discussion, but my party cannot accept that it is not the place of Assembly Members to make the ultimate decision on the mechanics of the measure that they wish to put before us. We are clear on that. The role of the Select Committee is clear. There is a debate to be had about the effects of the LCO on small businesses, and there will be comment from this place. However, the ultimate legitimacy rests elsewhere and the ultimate decision should be made in Cardiff.

Stephen Crabb: It is a pleasure to participate once again in the annual, not-quite-St. David's day debate on Welsh affairs, and it is a privilege to follow the former Secretary of State for Wales, the right hon. Member for Neath (Mr. Hain), who was economical with the time allocated, and made an extremely important point about the importance of home-grown, Welsh-produced television for an English language audience in Wales.
	The backdrop to the debate is, as right hon. and hon. Members have already said, the deteriorating economic picture facing Wales, the UK and the entire world. I was still a member of the Select Committee on Welsh Affairs when it began scoping out its inquiry into the globalisation report, which is one of the background documents to the debate. The economic scenario that we were considering two years ago seems very different to the one we are facing now. Looking back, it is interesting to note that what many of us regarded then as underlying strengths of the economy now look illusory, built as they were on piles of unsafe, risky debt.
	The report also highlights the fact that what hon. Members from all parties recognise as underlying continuing weaknesses in the Welsh economy now look even more troubling and disturbing. I am thinking of the growing pool of people not in education, employment or training, the persistent problem of worklessness and a rate of people claiming incapacity benefit in Wales that is higher than the national average. Some deep-seated economic issues have to be tackled, and the current economic downturn makes that more difficult.
	It was interesting and useful to hear the Secretary of State outline all the measures that the Government and the Welsh Assembly Government are taking to assist Welsh businesses, but I reiterate the point that I made earlier. The data we are seeing from Wales so far do not suggest that the Welsh economy is any more resilient to the downturn than other parts of the UK. I am thinking, for example, of the recent RBS purchasing managers index report, which is a monthly monitor of the state of business activity in Wales. The most recent report shows the eighth consecutive month of a significant contraction of private sector business activity in Wales, which is very concerning.
	At the end of January, the First Minister in Wales, Rhodri Morgan, said that he had no idea when the recession would end. That is probably a more realistic assessment than the one underpinning the pre-Budget report in December, which forecast the UK effectively bouncing out of recession six months from now. No one would regard that as a realistic economic forecast now. The truth is that we do not know when the recession will end, and it could be a long haul indeed for the Welsh economy and Welsh businesses. We all hope that better times lie ahead, however, and fundamental to that, and to reorienting and rebalancing the Welsh and UK economy, is focusing as never before on world-class skills and education. That issue has been flagged up already, and it was good to see that skills featured strongly in the Welsh Affairs Committee's report on globalisation.
	In the time that I have, I would like to make a few brief points, the first of which concerns further education. That was already highlighted by the powerful speech of the hon. Member for Ceredigion (Mark Williams), who spoke about some of the pressures facing the further education sector in Wales. The umbrella body for further education colleges in Wales, fforwm, predicts that about 450 jobs will have to be lost from further education colleges in Wales in the next 12 months as a result of the cut of about 3 million that is being made to further education this year. At a time when we need to focus even harder on the skills agenda to help the Welsh work force adjust to the challenges of the recession, the further education budget is actually being cut. My local college, Pembrokeshire college, is consistently the most successful beacon award winner in the UK, having notched up seven beacon awards in the past six years as recognition of its innovative and effective approaches to further education. In the next 12 months, there will be a 1 per cent. reduction in its budget at a time when it needs to be expanding the courses that it offers and the skills training that it delivers to the people of west Wales. That picture in my constituency is replicated right across Wales, with further education colleges having to make cuts at a time when they should be thinking about how they can expand services to help their local areas.
	Another issue flagged up in the report on globalisation was the importance of exports from Wales. There has been something of a success story in recent years. In his evidence to the Committee, a Trade Minister said that the Welsh economy had been a particular beneficiary of globalisation, with the value of Welsh exports growing by half between 1998 and 2005, almost twice the rate of the UK as a whole. He cited specialised electronics, technology, aerospace and the service sector as areas in which Wales had a comparative advantage relative to other parts of the UK.
	We celebrate the growth in exports from Wales, but if we dig a bit deeper into the figures and drill down into what is driving that growth, the picture does not look quite so rosy. According to the most recently released statistics, in the previous 12 months the value of Welsh exports had grown by 1.3 billion on the year before, up from 9 billion to almost 10.5 billion. That looks great on the surface, but when we drill down into those figures we see that that growth in value was driven to a significant extent by inflation of the oil price, as Wales is a significant exporter of refined petroleum products from the two major refineries in west Wales. When we strip out the effect of $150 barrels of oil and the increase in the price of refined products, we see that there are challenges to be addressed in increasing export volumes from various industrial sectors in Wales. Perhaps the picture is not quite as positive as we are led to believe.
	The Committee noted in its report that it was disappointed by the achievements so far of International Business Wales, the arm of the Welsh Assembly Government that is seeking to boost trade, particularly with China, secure inward investment and expand exports. Much more work needs to be done at UK and Welsh level on considering how to encourage Welsh businesses to take advantage of parts of the world that are still experiencing economic growth, such as India, China and south-east Asia. That is a major challenge.
	A point that was not highlighted in the Committee's report, but which is relevant to the discussion of the economy and globalisation, is foreign language skills. There has been a disastrous decline in the number of Welsh young people coming out of school with any meaningful qualification in a modern foreign language. Back in 2002, the Assembly Education Minister, Jane Davidson, said at the launch of the Assembly Government's national modern foreign languages strategy:
	Learning a language can empower individuals, promote cultural understanding and diversity and above all enable us to remain competitive in a global marketplace... can we honestly expect to become really effective traders or world citizens if we always simply expect others to accommodate our limitations? The answer must surely be no.
	That is great rhetoric, with Assembly Members talking up the importance of modern foreign languages, but what has been the effect of the policies of the past five years? There has been a decline every year in the number of young people of 15 starting GCSE courses in French, Italian or Spanish, and an even sharper decline in the number of those gaining grade C or above in their GCSE two years later. There has been a UK-wide decline as well, but the figures for Welsh young people show that as a proportion, significantly fewer pupils are coming out of Welsh schools with qualifications in those languages.
	Does that matter? I believe that it does. There was a view kicking around some years ago that given globalisation, and with English being the language of Microsoft, perhaps it was not so important any more for people to be multilingual, and that the English language would suffice for doing business. That view has been proved false. Companies value people with language dexterity, and it is important for trading and business relationships to have people who can go into other cultural and national contexts and speak other languages. Welsh young people who do not have such qualifications and are presented with opportunities such as the ERASMUS programmethe EU-funded exchange programme that enables students to spend a year or a term of their university course in a European universitywill find that such options are not open to them because they do not have A-levels or good GCSEs in modern foreign languages.
	Those are the points that I believe are relevant to today's discussion.

John Smith: I am grateful for the opportunity to speak in the annual Welsh affairs debate. We do not have many opportunities in the House nowadays to discuss Welsh issues exclusively, so the debate is welcome.
	As previous speakers have said, our debate today takes place against the backdrop of a serious global economic crisispossibly the worst international financial crisis in the past 100 years. I would therefore like to take the short time available to me to refer to three projects in my constituency, but not parochially, because they all have valuable strategic Welsh importance. I want to use today's opportunity to draw the House's attention to several issues surrounding the projects.
	The Conservative spokesperson has already mentioned the first project. It will come as no surprise to hon. Members when I refer to the defence technical academy in St. Athan in my constituency. It is progressing well. It was recently announced that Sodexho is to be the equity partner, replacing Land Securities Trillium, which had to withdraw becauselet us make no bones about itof the financial crisis. However, in many respects, Sodexho is a better fit. Unlike its predecessors, its core activity is facilities management, and it has been involved in the scheme from day one. It was always involved, but it has just become a 50:50 equity partner.
	The Minister for the Armed Forces made a statement in the House, saying that the negotiations were progressing well and were on track. A clear timetable is developing. A detailed planning application for the scheme will be submitted in May this year and construction will commence around August next year. That timetable is important, because we have lost time in the past two years, mainly because the project is so large and complex. It is the biggest single Ministry of Defence investment and its importance for Wales cannot be overestimated.
	The project will provide 5,000 direct jobs and train annually 25,000 service personnel from all three services. It will provide a defence training strategy in some of the most sought-after skills in the worldtechnical, engineering and information technology skills. I have always argued that the real value to Wales as a wholenot only to my constituencyis not the 5,000 jobs or the 12 billion private finance initiative investment over 25 to 30 years, or even the revenue, which runs to tens of millions of pounds, that will go directly to the local economy, but the transformation of Wales's reputation to that of a country that has a centre of technical and skills excellence. Our reputation for being dominatedstillby metal manufacture and mineral extraction can be transformed into a reputation for high value-added technology. That is the benefit: a change of reputation and an ability to attract inward investment.
	I am delighted that a Command Paper was put before the House on Tuesday, offering a contingent liability of 40 million to prepare the plans for this year and the design to get on with the construction next year.

John Smith: Of course I agree with that.
	St. Athan has been a huge success story for Wales and for Welsh politics. We won the bid because we were united across the parties and becauselet us be clear about thisours was the best bid. However, I must sound a rather disconcerting note this afternoon. The Command Paper was presented to the House on Tuesday, butI have given notice of this to the hon. Gentleman involvedit was blocked. An obscure procedural motion was used on Tuesday on a point of order to block the contingent liability of 40 million. The process cannot be stopped, but the effect of what was done on Tuesday could be to delay a recession-busting project that is vital for our country.
	I am sure that every Welsh Member of this House will condemn the hon. Member for The Wrekin (Mark Pritchard). I understand why he objects to the scheme: because he lost the bid. His bid did not win. I understand his protesting, but what is reckless and unacceptable is his bid to block the progress of the scheme. It is important that we move ahead with the planning in May. I call on all hon. Members to condemn his action. I am afraid that I must say to Conservative Members in particular: for goodness' sake, bring some influence to bear on him, because he is delaying a vital project.

Adam Price: It is a pleasure to follow the hon. Member for Vale of Glamorgan (John Smith), who is clearly proving an effective advocate for his part of Wales. I would like to focus on the economic crisis, which was at the heart of many of the speeches that we have heard. I particularly want to consider the role of banking and the effect of the crisis on Wales. In some ways, because we do not have an indigenous banking sector to speak of, we have been shielded from the direct effects, but of course we are dealing with the indirect repercussions of the banking crisis.
	As I see it, we face three categories of problems. One is the problem in accessing affordable mortgages. That particularly affects first-time buyers, who are benefiting from a fall in prices but are not able to get a mortgage because banks and building societies now often ask for loan-to-value ratio of 75 per cent. A 25 or 30 per cent. deposit is nigh-on impossible for first-time buyers. The second category of problem is the lack of normal credit facilities for small and medium-sized businesses; we have heard about that from a number of hon. Members. The third category is more long term. I foresee a possible long-term negative effect on public confidence in saving per se. That will affect pensionsreturns on equity investment are being hitand financial inclusion. People look at what is happening in the banking system and are clearly suffering anxiety about the safety of their savings and investments. They are also experiencing a tightening of credit as a result of the crisis.
	Those trends are particularly acute in the UK because of the absence of local and publicly owned savings banks, which are a typical element of the banking system in many European countries. The UK has a highly concentrated banking sector, in which there are a small number of very large institutionsinstitutions that, as we have seen, have unfortunately engaged in highly risky and slightly exotic investment activities over the past few years.
	The banking sector is also very concentrated geographically, in the sense that it is essentially focused on London and, to a lesser extent, Scotland. There has been a withdrawal of banking to regional banking sectors, so the traditional role of the banking managereven the business banking managerwho had a personal relationship with their customers has disappeared to some extent. The linkage between banks and the communities and businesses that they serve has become weaker in recent years.
	The crisis gives us an opportunity to shift the balance again. There is a need to have local and, I would say, publicly owned banking institutions as part of the mix. In particular, there is a need for banks that focus more narrowly on traditional banking and do not get involved in some of the investment banking activities that were an important contributor to the current crisis. In Wales, which lacks a local bank institution, there is an opportunity to create indigenous financial institutions. The Welsh Assembly Government, through their activity with the economic summit, are looking at increasing their ability to impact positively on the economy in Wales. Having an indigenous banking institution that is directly owned by the public sector, or over which the public sector has some leverage, is an important component of a medium-term economic strategy in Wales. As Geraint Talfan Davies wrote recently in the  Western Mail, in some waysalmost perverselythis is quite a good time to consider launching a new banking institution. A bank that does not have toxic assets on its balance sheet because it is a new institution could be a very favourable proposition.
	There are models out there. The Sparkassen, for instance, are local savings banks in Germany, rooted in local communities. Some services are provided by the Landesbanken, which operate as an umbrella institution owned at Land level by the regional governments. They have been very successful: about half the retail sector in Germany involves the Sparkassen. They have been unaffected by the financial crisis. Indeed, many have increased their lending because they are seen as a safe beta credit-worthy, trusted institution.
	Many European countries have a mixed economy in banking. In Germany, the private sector represents only 12 per cent. of the overall banking sector. Even Switzerland, which is famous for private institutions which may or may not be involved in nefarious tax-evading activities, has cantonal banks which are owned by local government, and which deal with 30 per cent. of the banking business of ordinary individuals. That model offers us a way forward in Wales.
	According to a recent  Financial Times survey, 81 per cent. of people in the United Kingdom support the idea of the locally owned, publicly owned savings bank as an alternative to what has been on offer. We used to have that in the UK, of course: we had the Post Office Savings Bank, which became National Savings, and we still have the remnants in National Savings and Investment. We also had Girobank, the people's bank, which was launched in the late 1960s and was very successful. It was the first bank in the world to launch telephone banking, and was also instrumental in launching the Link ATM network. Unfortunately it was privatised, perhaps because it was too successful.
	There is still a residual element of the municipal bank movement. There are six municipal banks left in Scotland, and Birmingham city councilBirmingham was the site of the first municipal banksays that it is considering creating a new one by means of a private Bill with which the House would deal later in the year. Ceredigion is considering the possibility of creating Wales's first ever municipal bank in order to provide credit for local businesses.
	Local authorities have the ability to offer mortgages. Birmingham city council is considering providing a top-up scheme in partnership with building societies. If the building societies were willing to lend the first 75 per cent. to first-time buyers, the council would provide perhaps 15 per cent. to make the purchase affordable. The Welsh Local Government Association is conducting research, as are the Welsh Assembly Government, to establish whether an umbrella product could be created through local authorities, possibly in conjunction with a new institution. I hope that it will be possible for the Westminster and Welsh Assembly Governments to act in partnership, but clearly the Treasury would have some decisions to make.

Adam Price: I absolutely agree. Credit unions could be part of this new mixed economy in banking and financial services. I mentioned Germany; the third element in the German tripartite banking system is the co-operative movementthe Volksbankenwhich is its equivalent of the credit unions. We need to build up the credit unions, and they might form partnerships with municipal banks. Municipal banks can legally take deposits, but they cannot offer loans. If membership of a credit union were linked in with holding a retail deposit in a municipal bank, one could have a complete array of financial services, and with local authority mortgages as well. These are exciting possibilities, and it would be relatively simple for the new savings banks to link up with the plumbing of the wider banking industry through the SWIFT system. They could provide other financial products from other institutions. This could be done on a low-cost basis and relatively quickly.
	As Members will know from their own experiences, there is a gap in terms of business banking. Finance Wales provided just 110 loans in 2008. There is an issue to do with European law, in that it has to offer those loans at between 4 and 10 per cent. above the European reference rate, so they can be relatively expensive. Finance Wales is, essentially, a quasi-investment bank or kind of venture capital organisation, in that it looks at a small number of high growth-potential firms, which leaves a gap in the market in terms of ordinary business banking for the vast majority of enterprises. Birmingham and Essex in England are looking at using local authorities' ability to offer loans on an unregulated basis. Birmingham is talking of offering 200 million in loans to local businesses. That could address some of the problems in the short term, but we need to create something similar to the Landesbankenlocally owned savings banks in conjunction with local authorities, and then an umbrella national institution that aggregates that and is able to provide a higher level of loans, pooling risk and providing expertise.
	We could also pool some of the reserves held in the public sector, both in the Welsh Assembly Government and local authorities. Instead of putting that in Icelandic banks, and suffering as a result of that, why not keep it and invest it in a Welsh-owned institution that could then offer loans to Welsh businesses and that could also take deposits from retail customers? Too often in the past, what has happened is that retail deposits given by Welsh customers have not been reinvested in the Welsh economy, but have been used by financial institutions based elsewhere, and we have seen very little benefit.
	Finally, if we did create this new architecture of Welsh financial institutions, it would greatly help if the Welsh Assembly had borrowing powers. I understand that the Labour party in Scotland has now made a submission to the Calman commission making the case for borrowing powers for the Scottish Government, and Northern Ireland already has them. It would be very positive if the Labour party in Wales were also to back having borrowing powers, perhaps in its submission to the Holtham commission, because that could underpin any new financial institution we were able to create.

Don Touhig: No one could have predicted that a problem that began with banks in America would lead to people throughout this country sitting at their kitchen tables worrying about their finances. Although the economic downturn we face is correctly described as global, its impact is local in the sense that every family in Wales has been affected.
	It is right of our Government to act now to boost the economy. Whatever the doom and gloom merchants say, that means borrowing more in the short term to help keep the economy moving and to help businesses and families during these tough times. Some have argued that we should not borrow to boost the economy. They would leave it to the market, but that would mean us abandoning families and businesses in Britain who are facing difficult timesfamilies who struggle with a loss of a job or to pay a mortgage, and the small business man or woman who has put everything they have into setting up their business. To stand back and do nothing to help them would have terrible consequences.
	We have to learn the lessons of the past. Laissez-faire policies are not the answer, as we saw in the two recessions in the '80s and '90s. Those recessions tore into the very fabric of society, causing massive damage. In my constituency, young people leaving education had no job to go to. People who had worked all their lives in the same industry were condemned to the scrap heap, and pensioners were expected to live on 69 a week. In the south Wales valleys, the experience that some called Thatcherism we called despair.
	If anything, the credit crunch has made us all realise how interdependent we all are. The very last thing that we in Wales need now is to turn in on ourselves in a narrow, nationalist sense and embrace the separatist agenda. However, I note that these days new Plaid has very little to say about independence, and it certainly does not mention the arc of prosperity to which it once said we should belong. Frankly, when someone is worrying about how they are going to put food on the table and whether they are going to meet this month's mortgage payment or even keep their job, the last thing they want from their political leaders is a sterile constitutional debate. I therefore hope that we can have some respite from more bids for powers for the Welsh Assembly. Now that the eminent diplomat charged with running the convention on whether or not Wales should have a referendum on more powers is busy in the Balkans, perhaps those who want to balkanise Britain will now leave it alone for a while.

Don Touhig: I was very happy to give way to the architect of new Plaid, and I do think that he had some very positive and important things to say. I am sure that they will be listened to by Ministers, because these problems will not be solved unless we all work together. I do recognise that that is an important point to make.
	One of the vital strengths of the Welsh economy is the readiness of our companies, both large and small, to use flexibility and to make and take opportunities for enterprise and innovation. Although we have made great strides in encouraging people to establish businesses in WalesWales is still a great place to invest and to grow a businessthere is much to do. We have to believe that we are going to come through this economic downturn. That belief is important to our future.
	Our economy will grow and our standards of living will improve, but we must be cautious about putting up what some may say could be barriers to investment. Here, of course, I am referring to the proposed Welsh language legislative competence order, which will be considered by this House in the coming months. My right hon. Friend the Secretary of State referred to a BBC reporter's blog; it is good to see that the licence payer's money is being used to help BBC journalists in Cardiff to promote their own political prejudices. We all know the BBC and its prejudices.
	That LCO could be the biggest shot in the arm for the Welsh language in modern times, so I welcome the announcements by the Secretary of State for Wales and the First Minister, who have promised the widest possible consultation. Certainly, for my part, I am content that the Welsh Assembly should have the responsibility for dealing with matters relating to the language, but such a power, should it be given, must be exercised in the interests of all Welsh men and womenthe 20 per cent. who are bilingual and the 80 per cent. who are not. In the coming months, I intend to ask a number of questions about the LCO, because it is not simply about the Welsh language; it will have an impact on our economy. Macro-economic policy is not devolved, and we have a proper duty and a right in this place to ask questions.

David Jones: The right hon. Gentleman is making a very important point about the Welsh language LCO. Does he agree with me that it is a proper function of the Select Committee not only to scrutinise the bid itself, but to scrutinise, by taking appropriate evidence, the measures that might be brought forward under the terms of the LCO, if it is passed?

Don Touhig: That could be a question for scrutiny by the Welsh Affairs Committee. I am sure that hon. Members on both sides of the House will receive letters from their constituents about that matter.
	With the country facing serious economic challenges, along with the rest of the world, it would be a serious step indeed to impose even more regulation on companies in Wales. I have one final word on this matter. Over the years, we have had very successful Welsh language policies. My right hon. Friend the Secretary of State referred to the Wales Office's language policy; I was the Minister who oversaw the introduction of that very successful policy. Such policies have been adopted by companies and the voluntary sectorI emphasis the word voluntary. I hope that during consideration of the LCO, the idea of making any language scheme voluntary will be considered and ultimately adopted. I think that that would be supported across Wales.
	For all the challenges that the present economic downturn brings, we must never lose sight of the fact that Wales is part of a global economy that will double in size over the next 20 years. The ideas expressed in the debate so far will contribute to the debate on how we approach that growth. There will be great opportunities in the future, but we must be ready to grab them. Our underlying purpose should be to make Wales a global leader in all those industries and services where our skills, our creativity, our enterprise and particularly our flexibility is known and is world-class.
	The Work Foundation has published a report called Manufacturing and the Knowledge Economy. It argues that the old way of separating manufacturing and services does not reflect the interconnected, interdependent nature of modern manufacturing, and I agree. Companies such as Rolls-Royce make more money from service contracts, sales of licences and hours of flight time on their engines than from manufacturing the engines in the first place. Car makers run finance houses offering loans to people who want to buy cars, and pharmaceutical companies offer health care services as well as selling drugs.
	The great challenges that we will face in the coming years are not Welsh, but global, and we have to be able to compete. Our real competitive advantage will be our knowledge base and capacity for innovation. In simple terms, we have to be smarter, quicker and more adaptable than our competitors. The world is undergoing a new industrial revolutionthe knowledge revolutionfuelled by the pace of technological change, and Wales must be at the forefront. The only way in which countries such as Wales will be able to compete is to retrain and upskill our work force to face the challenges of the future. We have to stay ahead, with new and innovative ideas, which we can fully exploit only if we have the skills to do so. Put simply, we have to stake a claim to be the linchpin of the new knowledge economy.
	With those challenges come great opportunities, and Wales could and should be at the forefront of making the most of them. I have always believed in our great strength as a society and in our capacity to respond rapidly to changing circumstances. However, we are facing challenges that may be greater than any that we have faced before, and we cannot be found wanting. There is too much at stake.

Lembit �pik: It is clear that, as in previous recessions, manufacturing in Wales has suffered more than any other industry. We all know that, according to a CBI survey, demand for manufactured goods in Britain is at its worst for 17 years but, like the right hon. Member for Islwyn (Mr. Touhig), I believe that the recession offers us an opportunity. He accurately encapsulated the importance of having the right attitude to the challenges that we face.
	In my constituency of Montgomeryshire, as in all Welsh constituencies, small, medium and large businesses face real hardship. Recently, I have made sure that, as far as possible, I am aware of the difficulties that businesses on the high street and in the local manufacturing base face. I have met many representatives from companies that are experiencing difficulty, including Woolworths, which of course tragically closed not long ago, and Stadco, which is threatening to cut more than 100 jobs in Llanfyllin.
	In addition, I have met representatives from Floform in Welshpool, which closed dramatically and suddenly a week ago, and I have met Gareth Pugh, whose construction business in Abermule seems to be going well despite his problems getting loans from the banks. I have also met people from Total Network Solutions and dozens of other companies.
	I have also listened to the voices in Westminster clamouring for long-term solutions to the crisis. In particular, I have listened long and hard to my hon. Friend the Member for Twickenham (Dr. Cable), our esteemed economics spokesperson. I think that I can say without fear of contradiction that, at the moment, he is effectively the Chancellor of Britain.
	The definition of the problem is pretty straightforward. I think that we in mid-Wales have been in recession for about three years now: without a new direction for our Wales economy, I believe that the problems that we face will only spiral. Salaries in Montgomeryshire and in Brecon and Radnorshire are down in real terms, according to objective data. We also know that unemployment in Wales alone has risen by 28 per cent. in the past year. This month, it affects 7 per cent. of the Welsh population. There has also been a 69 per cent. increase in jobseeker's allowance claimants in Montgomeryshire in the past year.
	Even the farming industry has suffered in the past few years. It has been blighted by bluetongue and bovine TB, and there is also the continuing dispute about how farmers are able to control foxes. The inability to control that pest in the most efficient way has an economic cost for farmers in my constituency. Therefore, I hope that the Minister will assure the House that he will do everything he can to prevent the introduction of electronic identification tags for sheep in Wales, which would merely place even greater pressure on our already overstretched farmers and rural economy.
	Like many other constituencies in Wales, mine has seen businesses close. Powys had the highest VAT deregistration rate in Wales in 2007, with 54 businesses closing and huge job cuts as a result. Manufacturing firms have been predominantly affected by the shrinking of consumer demand. I have mentioned a number of those companies already, but this week I learned that Control Techniques, a very successful international electrical firm in Newtown, is facing another 30 redundancies in the very near future.
	As a result, it seems to me that both the Welsh Assembly and the Government here must produce a specific plan of action, because the rescue packages that have been announced so far are not making a discernible difference in Montgomeryshire. I certainly do not deny that the Government are operating in good faith, and I support many of the proposals that they have made, but we need the action being taken to achieve results before many more jobs are lost.
	In that sense, I want to thank the Minister for agreeing to come to a meeting that I hope to arrange in the very near future. He will be able to hear directly about the problems that local small and medium-sized businesses in Montgomeryshire are facing. He has been generous in making that commitment of his time, and I assure him that he will have a constructive and insightful session. I believe that it will probably give him a good insight into the typical problems facing small and medium-sized businesses across rural Wales as a whole.
	The core issue, it seems to me, relates to the banks. They should not be reining in overdrafts and increasing interest rates on overdrafts for their existing customers, as they have. I am sorry to report to the Minister that much of the good work that is being put in place by the Government is being undermined by the banks, which are paying lip service to their partnership with the Government but, in any practical sense, are reining in the level of debt that their existing customers can secure.
	The Secretary of State already knows that in my constituency successful businesses have been forced to accept massive reductions in their overdraft facilities. I accept the conflicting demands on banks to shore up capital as well as to increase lending to small businesses, but they are in full knowledge of the support that the Government are giving them, yet they refuse to extend a hand to those businesses that are struggling to get by without their help. The message is simply not getting through.
	I find individual bank managers very co-operative, and have had many useful meetings with the major banks, but I am very close to naming those banks in my constituency that do not co-operate with the needs of business people. I hope that the Minister can pass that message through the Treasury to the banks, which are effectively in national control. They are morally obliged to co-operate to ensure that we do not lose more jobs needlessly in Montgomeryshire and across Wales as a whole.
	I would also suggest that we need a rather clearer economic narrative for Wales, and that has been touched on by other speakers, as well as an overarching strategy to pull us out of the recession. I am sure that a number of hon. Members would also agree that with the downturn, mid-Wales has the potential to be the environmental capital of Britain, as we have seen through the Centre for Alternative Technology and the fact that we export many ideas to other parts of Britain and Europe. The other side of that should be to create specific eco-companies that lead the way with green technology development as well as exporting those ideas elsewhere. If we look at Wales as an eco-nation, we can ride the wave of a growth industry at a time when we need to clarify our political narrative.
	Let me make two more short points. In mid-Wales, we are fast becoming not only the eco-capital of Britain but the wind turbine capital of Britain. There are mixed reactions to turbines, but in my view those turbines and the strategy of enforcing hundreds of new turbines in the form of wind farms in Montgomeryshire is misguided. They do not produce baseload because they are not a reliable form of energy. Although I would not be against them if they provided a substantial contribution to British energy requirements, my worry is that we would need 2,000 turbines to replace a single conventional power station. When the larger proposals come forward, as they will inevitably find their way to Westminster rather than Cardiff due to the exigencies of the legislation, I hope that local opinions and the cost-benefit analysis will be taken objectively into account. Although it looks like the Government are doing something when the turbines go up, they are not necessarily making as good an environmental policy decision as it might at first sight appear.
	My other point is one of praise, and concerns flooding in Montgomeryshire. The Severn flood plan occupies an extensive proportion of the land area of my constituency and we have been blighted with some serious flooding issues over the past few years. I have been working with the Environment Agency to see whether we can modify some of the policies that are imposed. A number of my constituents are concerned that they will end up as the victims of enforced flooding in order to protect other towns and settlements downstream. I am happy to report that as a result of conversations with the Environment Agency and Ministers, the Environment Agency has modified its policies, specifically policy 6, in order to take local concerns and feedback into consideration in its decision-making activities. That is a success story and it shows that if one works strategically with the Environment Agency and similar bodies, one can make a local difference by altering national policies for the greater good. I thank Wales Office Ministers for their co-operation in achieving an all-round good result.
	I should like real progress, with a partnership approach in terms of both economics and the environmental considerations that particularly affect Montgomeryshire. With the right infrastructure developments, both in connecting the rest of Britain to Wales through improved rail, road and air links, as well as a continued commitment to improving the canal and waterway system throughout Wales, we could see Welsh tourism flourish under the credit crunch, when more and more people will choose to holiday in the UK.
	I close with two requests. The first is that if the Government are genuinely to feed a large amount of money into trying to restart the economy, they could do a lot worse than invest in reconnecting Montgomery canal to the rest of the network. It is a multi-million pound scheme of construction work that would provide much-needed employment for the sectors that are suffering most in the economy.
	My second and final request is that the Minister heeds the advice of others who have spoken today to take a strategic approach to developing a hub and spokes air service across Wales. I declare an interest as a pilot in a fledgling air taxi company, which formerly transported the right hon. Member for Neath (Mr. Hain)without accident. I offer my humble services to fly the Minister about if he wants but, more important, to ensure that Cardiff international airport is connected to Welshpool international airportif I can describe it thusfor the greater good of connecting Wales by air, not, we hope, just for economic benefit but for cultural benefit too.
	I look forward to seeing the Minister in my constituency and I shall make sure that his visit is satisfactory and worth while, both for him and for the businesspeople he will meet.

Julie Morgan: It is great that we are holding this debate, celebrating St. David's day three days early. When I was preparing for the debate, I learned that St. David is sometimes called the patron saint of vegetarians, which was news to me. He was a committed ascetic and beer was banned in his monasteries.
	I wondered how those interesting points related to modern-day Wales. The Secretary of State mentioned the historic task of the Welsh rugby team tomorrow evening in France. If the team is successful, I do not know what St. David would think about the celebrations, but I certainly think that we all wish the team every success tomorrow evening in France.
	We are going through a difficult time economically in Wales and throughout the UK. As has already been said, it is important to tackle the economic difficulties at all levelsinternationally, nationally, in Wales and locally. I am pleased that the Prime Minister is going to the United States next week to speak to both Houses of Congress, to hear at first hand the details of President Obama's plans and to see how we can work together internationally to tackle the crisis.
	There are long-term and short-term things we can do to help the economy in Wales. Transport links should be improved, and I am pleased that the Government are planning such improvements, in particular the rail links to Heathrow and the electrification of the railway line from London to Wales. On Tuesday, I was pleased to meet Lord Adonis in the all-party group chaired by my hon. Friend the Member for Swansea, East (Mrs. James). Other Members in the Chamber this afternoon attended the meeting, too. Lord Adonis accepts the point that if south and west Wales is to attract business and develop its economy, it is essential that direct links to Heathrow are developed. Ideally, that would involve trains from south Wales running directly to Heathrow, via a loop from the main line to Paddington. A connection near Heathrow is being considered, with a shuttle service to the airport, but a direct service from south Wales to Heathrow would be infinitely preferable. I also support improvement to Cardiff airport in Rhoose.
	Many right hon. and hon. Members have signed my early-day motion, which urges the International Baccalaureate Organisation to stay at its base in Cardiff and now has 125 signatures. I thank those Members for their support. Sadly, at the organisation's board meeting two weeks ago, it confirmed its plan to move its European base to Amsterdam. It described Cardiff as remote and criticised the transport links. I condemn its decision, which does not recognise the work of its 330 staff, who have made it such a success. It now intends to expand, doubling the number of students, to create three international hubs, with Amsterdam as the European one.
	Plans to improve links to Heathrow might have played a role if their implementation had been much more imminent, but the organisation's mind was set on no longer having its headquarters in Cardiff and Wales. That highlights the importance of transport links, particularly those to Heathrow. The electrification of the main line from London to Heathrow must not stop at Bristol. The Severn tunnel must not be used as an excuse not to continue the electrification into Wales. We must do all that we can to influence the Government to ensure that that happens.
	To help in the present situation, we must also push forward the capital building programme, which the Government are already trying to do. I am very pleased that we in Cardiff, North have been given the go-ahead for the 70 million Whitchurch hospital development, which will provide acute and out-patient facilities. I hope that that will start this year, as it will be a big boost to the building industry, as well as an improvement to mental health services. It will replace the old asylum-style Whitchurch hospital, which is preserved by Cadw and has a certain charm but is certainly totally unsuitable for the treatment of mental health patients in the 21st century.
	The plan to build a new hospital has caused anxiety among some mental health patients in Cardiff, because the day facilityTegfanwill be knocked down as part of the process. However, we hope that another place has been identified in the hospital's grounds, where a small capital building programme will produce another day centre. If all that starts this year, it will be very positive and help both the mental health facilities and all the builders, plasterers, carpenters, brickies and everyone who will get the work if those capital building programmes go ahead.
	I am very pleased that the go-ahead has been given for the Cardiff, North medical centre. It is a much smaller project, but it will also stimulate the building industry in my constituency and provide good, up-to-date facilities for the people of Pontprennau, Thornhill, Llanishen and all the people of Cardiff, North. The original building was lost to a devastating fire.
	I welcome the extra millions of pounds committed by the Government, as my hon. Friend the Member for Vale of Glamorgan (John Smith) said, to the defence training academy at St. Athan in the Vale of Glamorgan, which is very accessible to my constituency and all the surrounding constituencies in south Wales. Again, the capital building programme will provide a great impetus to all the building trades, as well providing long-term employment. Introducing such capital spending is one of the key ways to keep employment and boost the building trade. Transport and a capital building programme are two of the things that we should be working on.
	I pay tribute to the Education and Skills Ministers in the AssemblyJane Hutt and John Griffithsfor their extreme swiftness in developing the ProAct programme. It is an ideal programme, under which people will not fester at home when they are unable to work. They will be able to go out and get skills that will enable them to improve their job chances or to continue in their jobs with increased skills. That is exactly the sort of programme that we want. We have discussed today how many people it has reached, and obviously we do not yet know how many firms and individuals have benefited from it. However, I understand that 150 firms asked for information, and no doubt many of those requests will develop into actual help.
	It is important that the Government look again at the planned reductions in the number of civil servants. There have been plans to downsize the civil service to make efficiency savings, and if there are jobs that are not productive and efficiencies can be made, we should make them. However, it is worrying that the cuts will be made when there is growing unemployment in areas where civil servants are working. Furthermore, there is a real problem at the Department for Work and Pensions, given that more people need help. It makes no sense to reduce the number of civil servants and offices at the Department, given that there will be huge demand for its services. The Cabinet Office Minister at the Committee meeting that I attended this morning acknowledged that we should look at that issueperhaps the DWP will need more, rather than fewer, civil servants, given that we want to give individual help to people so that they can get jobs.
	Finally, I want to make a point about the Severn tidal barrage. I am glad that we have reached the stage of considering the short-listed schemes. We have to weigh the huge advantages of the energy that the barrage can produce against the environmental consequences and come to a decision about which will give the greater boost to the environment. Sometimes when we hear about the environmental disadvantages, we do not weigh them against the huge environmental advantages. Obviously, I want to see what the impact study comes up with, but I come from the position that the barrage would be a great step forward to harness all the power of the Severn estuary. I accept that it will be a tragedy if the Severn bore goes and I know that there are environmentally damaging features, but let us weigh those against the huge increase in energy.
	In conclusion, I should say that St. David's most famous affirmation was that we should do the little things; I did know that he had said that. We need to do the little things at local government and community level and build up to the international level. In that way, we will be able to tackle the difficult economic situation together.

Dai Davies: People in my constituency have campaigned against the funding formula for local government for more than 10 years. I was recently at yet another presentation by Lord Barnett, who accepted yet again that there is a need to consider a needs-based formula. My constituency's uplift for this year of 1.5 per cent. will result in the loss of front-line services and a staff reduction. In my opinion, that is unacceptable. I urge the Government to bring forward a review of the Barnett formula at the earliest opportunity. The Assembly is looking into the issue, but the time being wasted is costing our constituencies very much.
	The worry is that the 500 million cut for next year will be even worse for us; that cut in services will go very deep. I also ask the Government to review the rates on empty property. If local government bodies own industrial parks, they have to pay hundreds of thousands of pounds in empty property tax. The principle behind the taxto get people to use properties quicklywas good. However, given the economic crisis that we are in at the moment, that is not a reality.
	I am sorry to say that the problem with the banks is not new; it has been going on in my constituency for a considerable time. I raised the issue in 2006 in the House, soon after I first entered it. The problem is that average wages in my constituency are around the 17,000 mark, but house prices there average 100,000. Banks were giving 100 per cent. mortgages, the debt bubble just grew and grew and nothing was done to reduce it until the global crisis.
	Credit card interest is a huge problem. The interest rates are absolutely enormous and cost our constituents huge amounts of money on the basis of what they borrow. Taking the point made by the hon. Member for Brecon and Radnorshire (Mr. Williams), we need to do all that we can to put money into people's pockets, as well as looking at loans to businesses. I support loans to businesses, but without people buying, those businesses will still sufferthey will just borrow more and more.
	We have heard a lot about the global economy. This country of oursWales, I meanhas exported for hundreds of years. It has led the way in exporting. Going back to the civil war in America, we exported cannon balls. We have exported everything, from coal to steel toas nowmodern technology. The problem is that those at the top over the past 10 years have got richer and richer while those at the bottom have suffered because of it. There will always be enough in this world for everybody's needs, but there will never be enough for someone's greed, and the greed of those individuals has destroyed the financial services. The financial control of these companies belongs to the many, not the few. We need to bring bank controls back to local economies and local areasthrough credit unions, for example.
	On regeneration, one of the projects that is vital not only to my constituency but to that of the Secretary of State and to constituencies along the Heads of the Valleys road is the dualling of that road. It is a massive project that will take a long time, but delaying it is causing huge problems to businesses in our areas. It is also a huge opportunity for construction and people's jobs. I urge the Secretary of State to do all that he can to bring that project forward.
	We have heard about rail services. The launch of the rail link in my constituency last Februarya year ago nowhas been so successful that the passenger numbers projected for the fourth year are travelling on it already. That is a fantastic demonstration of what rail can do for us. I urge the Secretary of State and the Government to look at where we can extend rail services. That is a massive opportunity. We had services across all our valley communities, and we need them back.
	The shadow Secretary of State touched on tourism, but she did not mention history. The history of the south Wales valley built the world. The industrial revolution spread from Cardiff to Merthyr to Torfaen to Blaenau Gwent. There is a massive opportunity to tell our story, especially to the Americans. We virtually built Americalet us bring them back to spend their money in our constituencies! To do that, however, we need integrated transport. Bus services and rail services need to work together. They are not doing that at the moment: they are increasing in one area and reducing in another. We have seen regional buses taken off and bus services cut. That is not good news for us.
	The Welfare Reform Bill is currently going through Parliament. Last week, I mentioned that in my constituency we have 3,000 people looking for work and 6,000 people on incapacity benefita total of 9,000 people and an average of 200 to 250 jobs. That does not fit. However, the training opportunities are huge, and that is a real goal. Within that, we must get joined-up services. The hon. Member for Cardiff, North (Julie Morgan) mentioned jobseekers and jobcentres. Jobcentres need to work with other organisations as well. When individuals enter them, they are dealt with just in that one place. There is lots of help out there, but we need joined-up thinking, not working in isolation.
	Funding for further education has been raised on several occasions. I urge the Secretary of StateI know that this is a subject very close to his heartto speak to the people at the sharp end. When we as politicians speak to the people who run these facilities and educational establishments, they tend to tell us what we want to hear. I have three establishments that cover my constituency, and the staff and the students tell me that they are in trouble. They will not be able to provide the services that they do already, and certainly not the services that we need for training opportunities.
	I want to touch on two other subjects. The first is the steel industry, which is close to the hearts of many Members of this House. There are continuing problems in that industry. The main plant shut down in my constituency in 2002. Across the country at that time, we lost 10,000 jobs, and we are now seeing another 2,500 go. We must do everything we can to give the steel industry a level playing field. I have urged the Leader of the House to introduce a debate on the future of the steel industry, and I hope that that will happen in the near future. One of the areas for which we can use the industry is training. It has one of the best training records anywhere and I urge the Government to look at that when we look at the apprenticeships Bill. The opportunity in Wales to use the industry to train is massive.
	Lastly, I have another big concern. I know that many Members have been in contact with the police authorities and the police themselves about threatened and perceived cuts to police funding. We hear from this House that money is being spent and that more police are on the streets, but in my constituency we have seen some police stations shut down and some have cut their hoursfewer police on the streets. We need to get the record straight, whichever side is right or wrong. We need to come together and sort it out. In a time of downturn, we will see more people on the streets. We may well see more crime because of it, with people forced into situations such as house repossessions. It is not going to be easy, but we need to work together to ensure that our communities are safe and ready when the global downturn turns around, so that we are there to respond to it.

Paul Flynn: The problems of the credit crunch in my constituency mainly affect the manufacturing sector. At one point, 50 per cent. of Newport's work force were involved in manufacturing, and about half of that figure are involved now. We have had serious problems, such as redundancies and short-time working in Novelis, Quinns radiators in Llanwern and Panasonic. These are terrible blows to the many thousands of workers concerned and their families. The only good thing to have come out of this recession is that there have not been any closures. No one has closed down a plant, or a section of plant, and then demolished the plant itself. Sadly, that happened in Llanwern in the last recession, where they started to knock down the coke ovens in the very week that the price of coke rocketed throughout the world, and we ended up importing coke from China.
	There is optimism that the manufacturing industry will be ready to take off when we come out of the other side of recession. There are some good news stories. A month ago, a plant opened on the docks in Newport, at Sims, which is the biggest of its type in the world, and it is next to two other plants that are the biggest of their type in the world. The Sims plant deals with redundant electronic equipment under the waste electrical and electronic equipment directive, and it is a remarkable piece of machinery. Old computers, vacuum cleaners, calculators and so on are wheeled in one side, and at the other end they come out as four different types of plastic, metals and precious metals such as silver. It is a wonderful piece of equipment that is unique to the world, and the biggest in the world. Next to it, on the same docks, is the biggest piece of end-of-life car recycling equipment in the world, and next to that is the biggest refrigeration recycling plant in the world, which is also the most efficient at extracting gas. There are, therefore, some good news stories to tell.
	Much that is good is happening in Wales this year. It is the 10th anniversary of having our own Government on the soil of our country for the first time in centuries, and we should acknowledge what a success that has been, particularly the One Wales agreement, through which two parties are working together to give us stable government in Wales that can plan for the future. I am looking forward to that anniversary being suitably marked. Unfortunately, it is up against [ Laughter. ] I hear laughter from one of the obstacles that I was going to mention. The two main obstacles to the Assembly and drag anchors on it have been neurotically power-retentive Welsh Members of this House who weep when they see power flowing down the M4 to Cardiff, and the inertia of civil servants who do not like change and are not attuned to taking on purely Welsh initiatives, particularly those that come from the Labour party. It is significant that about half a dozen of the civil servants at the Welsh Assembly earn more money than the First Minister himself.
	I have been asked to be brief, but I have great concerns about the legislative competence order. I think that it will make little difference to the Welsh language. In 1961, Saunders Lewis made a great speech, entitled Tynged yr Iaith, that shook the Welsh-speaking nationsaying that the Welsh language would be dead by the year 2000. It should have died out centuries ago, given that it is spoken by fewer than 1 million people and is up against a great world language, but it has prospered magnificently. A list has been mentioned of prominent people from Wales who have won competitions on UK television for choirs, performers, singers or musicians. Many of them are the products of Welsh language education, because of its emphasis not just on the Welsh language but on music and acting skills. It is a great success story, and we have been successful in many other ways as well.

Daniel Kawczynski: I am the only English Member of Parliament to speak in the debate and I look forward to presenting a perspective on cross-border issues that affect my constituency of Shrewsbury as a result of devolution in Wales.
	It is appropriate to hold a debate on Walesit gives Welsh Members of Parliament a tremendous opportunity to talk about the Principality. However, I greatly regret that the Government have not fulfilled their commitment and kept their promise that we would have debates in the Chamber on the English regions, and that there would be Question Time about the English regions. My regionthe west midlandshas more people than Wales and contributes more to the gross domestic product of the country as a whole than Wales, yet we have no Question Time and no opportunity to discuss the issues that affect us.

Daniel Kawczynski: Very much so, Madam Deputy Speaker. I was about to mention Montgomeryshire, which is the seat next to mine. The hon. Member for Montgomeryshire (Lembit pik), who has already spoken and is an assiduous Member of Parliament, represents 57,000 constituents, whereas, just across the border, I represent 74,000 constituents. That is a staggering extra 17,000 constituents with whom I must deal in comparison with the Welsh Member of Parliament just across the border. That is important, because we all want to do everything possible to support our constituents, table Westminster Hall debates for them and ask questions on their behalf, yet it is a problem when Members of Parliament have the same budget, but 17,000 more constituents. We must tackle that problem.

Lembit �pik: But I have only one airport.

Daniel Kawczynski: I want to consider proportional representation in Wales. I am joint chairman, with the hon. Member for Central Ayrshire (Mr. Donohoe), of the all-party group on the promotion of first part the post. We recently went to the Scottish Parliament to take evidence from Members of the Scottish Parliament about the problems that they have encountered with proportional representation. I perceive proportional representation in the Welsh Assembly as a threat ultimately to our electoral system in England. I believe that there should be one electoral system for the whole United Kingdom. At the end of the day, we are one country, and there should not be PR in Wales. Being elected under first past the post to represent a constituency makes one accountable to the people in that constituency. All parliamentarians here have a tremendous bond with their constituents. They know that we are accountable to them, that we live in the constituencies that we represent and that we are directly elected by them. In my view, PR is a travesty, which increases the distance between politicians and those who elect them.

Daniel Kawczynski: As the hon. Gentleman knows, my main duty is to England and I speak on behalf of my constituents.
	The Welsh Assembly creates huge difficulties for English border towns. As I said earlier, the Royal Shrewsbury hospital loses 2 million a year as a result of the different mechanism whereby the Welsh Assembly pays for treatment across the border. When I made that point to the Chairman of the Welsh Affairs Committee, he made a derisory reply. We have patients coming from Wales to the Royal Shrewsbury hospital who get life-saving medication to which my constituents in Shrewsbury are not entitled. I have to fight tooth and nail to secure life-saving treatments for my constituents that people from Wales get automatically in our hospital. That causes huge frustration and anger and divides our two communities.
	Another problem is bovine tuberculosis. We in England had to kill 40,000 cows last year as a result of bovine TB. I am grateful that the Welsh Assembly is looking into that terrible problem and that it is holding trial culls of badgers in Wales. It is just a shame that there is not more co-operation between our Parliament here in London and the Welsh Assembly over the issue, which transcends our borders. There should be far more assimilation and co-operation in dealing with such major issues.
	The hon. Member for Montgomeryshire also mentioned flooding. He thanked the Minister for his intervention, which he said would prevent part of his constituency from being flooded. However, flooding causes tremendous misery on our side of the border. Shrewsbury floods repeatedly, as do all the other towns on the River Severn, through Herefordshire, Gloucestershire and Worcestershire, causing hundreds of millions of pounds of damage in lost business. The way to resolve the problem is not to have little barriers in each town, but to have a wet washland scheme at the source of the River Severn, across the border in Wales, which would flood a large piece of agricultural land, which would become a marsh in the summer, encouraging wildlife, and a lake in winter. However, the hon. Gentleman said that thanks to the Minister's intervention, that proposal has been blocked. I shall be telling my constituents in Shrewsbury about that and trying to find out more about how the Minister intervened to prevent mere scrubland or agricultural land from being flooded in a rural part of mid-Wales. The Minister is happy to do that, despite all the suffering from flooding in Shrewsbury and all the other towns down the River Severn. That is simply unacceptable.
	On a positive note, I would like to put in a plug for the Wrexham-to-Marylebone rail service. Welsh MPs and English MPs worked together to secure that vital link from Wrexham to Marylebone, which goes through Shrewsbury too. That link is vital for business and tourism. However, Virgin Trains and Arriva are doing everything possible with the Office of Rail Regulation to try to scupper that service. I very much hope that the Minister will do everything possible to safeguard that important service, which operates from Wrexham to London.
	The other point that I want to make briefly is this. I have great concerns about the grants that the Welsh Assembly gives to businesses, which are much greater than those that we can afford in England. Those grants are uncompetitive and unfair. They lead to many Shropshire firms going just across the border to set up business and thus causing[Hon. Members: Hear, hear.] Hon. Members are cheering, but those moves are leading to significant job losses in Shropshire.
	Finally, a lot of Welsh children come across the border to go to schools in my constituency. Many rural primary schools are under threat from closure because we receive only 3,300 per annum for every child and we are ranked 147th out of the 149 local education authorities in England, which is leading to huge pressure on our schools. I hope that the Minister will bear that in mind as well.
	I am trying to say this respectfully, as the only English MP in a Welsh debate, but what I am trying to get across is this: I love Wales. We went on holiday to Wales last year, to Mwnt bay, which is absolutely beautiful. My family and I even spent an afternoon on the beach in Mwnt with my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) and his family. During my holiday I also met the hon. Member for Ceredigion (Mark Williams) in Aberystwyth, in his constituency. We all love Wales and we all want to see it prosper.
	I am just trying to convey some of the problems and frustrations I have as a Member of Parliament representing a border town that is losing out in certain ways as a result of increasing changes between the Welsh Assembly and our own Parliament. I very much hope that we can all work across the border because, at the end of the day, we are one country and we should be working together to improve the lives of our constituents in both countries.

Albert Owen: It really is a pleasure to follow an English MP in this debate on Welsh day. I am very pleased to be able to speak on Welsh affairs. There are, as the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) mentioned, some cross-border issues, and there are occasions when I need to speak on English affairs. It worries me that the Conservatives have proposals for English-only votes on English-only matters. That would deny me as a Welsh MP from representing the interests of my constituents when they go across the border for essential services.
	I believe in an integral United Kingdom and in the freedom of movement of people across the borders for services and goods. Listening to the hon. Member for Shrewsbury and Atcham, I have to say that I had thought that it was only the nationalists who believed in this type of segregation; yet he indicated that he wanted to lift Offa's dyke up to prevent Welsh people from coming across the border and businesses coming from Shrewsbury into Wales. Well, we Welsh Members in this Parliament want an equal voice on matters affecting the whole of the United Kingdom. I am here today to represent the views of my constituents on some local matters, but also on those of national interest across the UK.
	In a few days' time, I hope to promote Anglesey, the mother of Wales, in the mother of Parliaments with an Anglesey day. I know that the Wales Office is co-operating on that matter so that all can benefit from the culture and heritage of Anglesey and from the economic advantages when people come into my constituency. It is about promoting my constituency.
	I want to refer in greater detail to a couple of important Welsh affairs issues, into which there have been inquiries. We have heard today about the important roleI disagree with my hon. Friend the Member for Newport, West (Paul Flynn) on this matterof the Welsh Affairs Select Committee. I think it does a good job of scrutinising Welsh legislation coming from the Assembly in the form of legislative competence orders. We take this matter very seriously and we liaise with other MPs, so if they wish to raise any strong issues on behalf of their constituents, they will be fed into that mechanism.
	I want to concentrate on two particular inquiries and the difference they have made to the north-west Wales region and my constituency of Ynys Mn. The first was into prisons in Wales. We worked on the important issue of prisoners having to move far away from their homes to serve their sentencessometimes into south Wales from north Wales, but also into other parts of England. That makes it very difficult for their families to visit them. The Select Committee identified the need for a prison in Wales and we lobbied particularly for a prison in north Wales.
	A few weeks ago, the Justice Secretary announced a preferred site for that prison in north-west Wales, and I am very pleased about that, as I lobbied hard for it. As a result of the recommendations of the Welsh Affairs Committee, that preferred site in Ferodo in north-west Wales provides the opportunity to create hundreds of jobs in the area. The desolate site of the Ferodo factory, which has a nightmare industrial relations history, will now provide well paid and secure jobs. That is good evidence of the Welsh Affairs Committee raising an issue and making recommendations, resulting in benefit to the people of north-west Wales and the people I represent. It is evidence of the UK Government delivering for the people of my area.
	Energy in Wales, which is relevant to everyone in the UK, was the subject of the other inquiry that I wish to deal with. We had a follow-up inquiry into clean coal and other technologies as well. One of the main findings that would benefit my constituencya cross-party recommendation, made by parties including the Liberal Democrats and Plaid Cymruwas that if new nuclear went ahead, and the United Kingdom Government supported new nuclear development, existing sites in Wales would benefit from that. That was a clear, cross-party view at the time. The recommendations said that the extension of Wylfa power station needed to be considered. I can inform the HouseI am sure that the Under-Secretary of State for Wales, the hon. Member for Caerphilly (Mr. David) will confirm this when he winds upthat there is movement on that issue. There is a full study looking into a possible extension, which would ensure two or three years' more generation at the Wylfa site. That would provide extra jobs, skills and opportunities to young people over that period.
	I want to inform and update Members on an issue that the hon. Member for Ludlow (Mr. Dunne) raised earlier, when he was present. He is a supporter of Anglesey Aluminium, because Bridgnorth Aluminium in his constituency is one of the main customers of Anglesey Aluminium. I declare an interest as chair of the all-party aluminium industry group. The hon. Gentleman and I are working together to keep that smelter open. There is a big issue about the power contract, which is due for renewal in September. That is threatening some 600 to 700 jobs in my constituency.
	All the political avenues are being explored, as I have explained in parliamentary questions, and indeed in the Welsh Grand Committeeanother issue on which I disagree with the hon. Member for Newport, West. I think that it is an important forum for raising issues. He does not agree, and neither do the press, but it is an opportunity for me to raise issues on behalf of my constituency. I welcome the fact that the Secretary of State is encouraging us to hold more of those Grand Committees. They are important. I do not blog; some people spend a lot of time on social websites, but I like to speak in this House, on behalf of my constituency, on important matters on as many opportunities as I can get.
	The issue of Anglesey Aluminium is complex, because the Rio Tinto Zinc Corporation, the parent company, is shedding 14,000 jobs worldwide. It is also reducing the production of aluminium across the world, so this is a precarious moment for the aluminium industry and for the renewal of the contract. I assure the House that everybody is working together on the issue. The Welsh Assembly Government are working on a new biomass plant, after the closure of Wylfa. The Wales Office is acting as a host, and as a facilitator between the Welsh Assembly Government, the Department of Energy and Climate Change and the Department for Business, Enterprise and Regulatory Reform, to get the best political outcome. At the end of the day, it will be a commercial decision, but I hope that there are more favourable conditions, so that we can save those jobs.
	I want to talk more about nuclear power, green and low-carbon energies, and the opportunity for Wales to be a leader and a pioneer in the low-carbon economy. The Climate Change Act 2008, the Energy Act 2008 and planning provisions provide an excellent framework for the development of renewable energy. The Energy Act also provides us with renewables obligations, so that there can be progress on an industrial scale. That will help to ensure that there is benefit. We must have nuclear as part of a rich mix if we want a safe, continued electricity supply for industry and our homes. I think that we are moving towards consensus on that. I read this week in  The Independent that four leading environmentalists have said that they are pro-nuclear. One of them was a senior director of Greenpeace, who now sees the value of nuclear power. He calculates that the perceived risks associated with nuclear power are less than those posed by climate change and global warming. If we are to continue to build a prosperous, low-carbon economy, we need nuclear power. The UK Government, along with the Nuclear Decommissioning Authority, have listed a number of preferred sites for the first wave of new nuclear build. I am pleased to say that Wylfa is part of that first phase.
	A new nuclear power station in my area could create as many as 9,000 construction jobs, as well as the generating jobs that will follow. Those are high-skilled, well-paid jobs that would benefit my constituents. There is only one brake on consensus. I read with dismay this week a letter in  The Western Mail that was written jointly by the chair and the environmental spokesperson of Plaid Cymru. The letter said that if Plaid Cymru was ever in power and had to make a decision on new nuclear on Anglesey, it would vote against it.

Albert Owen: That is an interesting question, and that is what dismays me. The environmental spokesperson and the chair of Plaid Cymru, speaking about all these national issues on television, said that they would not back a nuclear power station in my constituency. In 2007, the Assembly Member for my constituency stood on a platform and said that he was fully in favour of nuclear power. I find it inconceivable that the leader of a serious political party can say that he is fully in favour of nuclear power while the chair and the environmental spokesperson say that they are against it. Far from being enlightened about the position of the chair and spokesman, the electorate of Ynys Mn are confused by the mixed message, at a time when jobs are at a premium.

Adam Price: What is the position of the Labour Environment Minister in the Welsh Assembly Government? What, indeed, is the position of the Welsh Assembly Government, who have said that they are against nuclear power? If the issue of nuclear power were devolved to the Welsh Assembly Government, the majority of Labour Members there would vote against it as well.

Nia Griffith: At this time, we are all rightly concerned about the economy. Every job loss is a devastating blow for the worker affected and his or her family. I know that there has been a tremendous amount of activity both at Cabinet level and among ordinary Members such as me, in groups such as the all-party parliamentary group for the steel and metal related industry. We have been lobbying the Secretary of State for Business, Enterprise and Regulatory Reform, who has agreed to attend a steel summit to meet the appropriate representatives of the manufacturing industry, and I know that many similar initiatives have been undertaken involving such industries as motor manufacturing. However, it is important that we do not fuel scaremongering rumours and talk the economy down. That will only sap confidence and stifle efforts to get the economy moving again.
	I share the concern expressed by Members about the somewhat erratic and obstructive behaviour of some banks, including sudden changes in the terms and conditions of their lending. Some successful businesses in my constituency have been badly treated in that way, and only following my intervention have things got moving. That should not have been necessary. I hope that my right hon. Friend the Secretary of State will convey that message to the National Economic Council.
	An extremely important element of the Labour Government's strategy to help people through the economic downturn is the determination to carry on with public investment for the future. My own county, Carmarthenshire, has an impressive school building programme, but EU convergence funding is giving cause for real concern. Carmarthenshire has a number of projects that it is ready to proceed with, but it is experiencing difficulty in drawing down EU convergence funding via the Assembly. I have secured the agreement of the Deputy Minister for Regeneration in the Assembly to visit my constituency and meet council officers, but I would be grateful if my right hon. Friend the Secretary of State did all he could to persuade Assembly Ministers to prioritise the release of convergence funding to projects that are ready to roll. I also ask him to impress upon Assembly Ministers the logic of extending the western valleys initiative to include not only Cross Hands, but the whole of the Gwendraeth valley, the most western of the south-west Wales coal mining valleys.
	I turn now to a very sensitive matter: consideration of foreign workers. It is important that when we do so, we attack structures and not peoplethat we look at structures, and if necessary criticise them and seek to change them, rather than resort to racist attitudes and comments. We are all too aware that there are organisations out there whose agenda is to breed fear and hatred and to create scapegoats, and who seem to have money to spend on glossy and very deceptive leaflets. We need to take a clear stand against such organisations and their attitudes.
	I know from speaking to people in my constituency that they are not racist. They recognise the enormous contribution to Welsh society that people born abroad have made, particularly in our health service. They are, however, understandably alarmed when they hear rumours that contractors working on big infrastructure projects, such as the gas pipeline or the construction of the power station in Pembrokeshire, are taking on foreign workerssometimes in large numbers, according to the rumours. I would be very grateful if my right hon. Friend looked into this matter and found out why foreign workers are being taken on, supposedly in preference to Welsh workers. If this is happening, we must ask why. If it is happening because employers think they can get away with shoddier terms and conditionslower pay and fewer rightsthat needs to be sorted out.
	There was tremendous support among Labour Members for the Temporary and Agency Workers (Equal Treatment) Bill, and work has subsequently been done at both EU and national levels to improve terms and conditions for such workers, but we need to know exactly why these foreign firms appear to be giving preference to foreign workers. Using them on the cheap is not fair to our workers, who are being undercut, and it is not fair to foreign workers, who are being exploited. If foreign workers are being taken on instead of Welsh workers because our workers do not have the appropriate skills, we need to identify exactly what those skills are and make sure we provide opportunities for our people to acquire them. We also need to think ahead about what skills will be necessary in future, particularly as we develop public infrastructure projectsand, it is to be hoped, when private sector opportunities open up as the economy picks up. We need to make sure, too, that we are equipping our young people to take up such opportunities.
	Lastly, may I ask my right hon. Friend to wear two hats at once: that of Secretary of State for Wales and that of Minister for digital inclusion? I should like to bring to his attention the excellent work of an organisation called UCanDoIT. At present, Trina Davison, a constituent of mine, is the only person working across the whole of south and west Wales who is providing the valuable service that UCanDoIT offers. What Trina does is work with housebound people in their homes to sort out computer equipment for them and link them up to the internet. In some cases, she is working with partially sighted people, and she teaches them to use special technology that reads things out to them and gives them access to computers, e-mail and the internet. I would be grateful if my right hon. Friend met me to discuss what more can be done to extend this excellent work in Wales and give more people the opportunity to get online. For people who are housebound, internet access is particularly important, both for potential employment opportunities and for social contact, which can greatly enhance well-being.

David Jones: As is the case with most St. David's day debates, this one has been thoughtful and generally good-natured, reflecting the good humour that is characteristic of our nation. I am indebted to the Secretary of State for the important information that today is, in fact, not St. David's day but the feast day of St. Isabel of France. Like him, I hope that that does not bode ill for tomorrow evening, although I am sure it does not. Even in our part of Wales, where we prefer the spherical ball to the oval type, we are following the fortunes of the Wales team with great interest; indeed, a constituent of mine said only the other day that what he was particularly pleased about was that the only Englishman who is likely to get his hands on the Six Nations trophy is the engraver.
	The debate has, predictably, been dominated by concerns about the economy. The hon. Member for Aberavon (Dr. Francis), the Chairman of the Welsh Affairs Committee, spoke about his own constituency, but he also discussed the important work that his Committee is doing not only on the process and scrutiny of legislative competence orders, but on the impact that present economic conditions are having on the Welsh economy. I must rise to the hon. Gentleman's defence and say that he is an excellent Chairman: he chairs the Committee with great sensitivity and great wisdom. He does not need to be told to crack the whip. He knows how, from time to time, to tighten the screw, but he does not need to crack the whip.
	We then passed on to the hon. Member for Ceredigion (Mark Williams), who also spoke about the impact of the current economic downturn. He spoke about the higher education sector, which is of course important, in his constituency and about the need for reskilling and upskilling. Importantly, he also mentioned the farming industry and the adverse impact that electronic identification of sheep will have on the Welsh agriculture sector if it is allowed to go ahead. My constituency is in many ways similar to his, and I can tell the House that many farmers there are very concerned about whether, if that system is introduced, it will be worth while continuing farming.
	The impact on the auction industry would also be substantial. I have spoken, for example, to the directors of Ruthin Farmers Auction Company, which regularly sells some 5,000 head of sheep in a session. They say that it will be quite impossible to read the ID tags of each individual sheep as it goes through. I therefore echo the hon. Gentleman's words and urge the Minister to do whatever he can to persuade DEFRA to obtain a derogation from this wrong-headed European legislation.
	We had a very short and focused contribution from the right hon. Member for Neath (Mr. Hain), who probably even now is sharing a railway carriage with my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan)I think that they are going to the same destination this evening. He spoke about a very important subject: Welsh broadcasting and English language broadcasting in Wales. There is no doubt that that sector is under severe threat. I commend to the Government what he had to say about the difficulties that the Welsh broadcasting industry is facing and suggest that they take his remarks on board.
	My hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) spoke about the deteriorating economic picture in his constituency. He spoke about the need for additional investment in further education and expressed his concern about the budgetary cuts imposed on the sector by the Assembly Government. He also made a very important point about the importance of language skills. In Wales, we tend to obsess about the Welsh language, and it is important, but so are international languages. In an increasingly globalised world, foreign language skills are absolutely necessary and my hon. Friend was entirely right to make that point.
	We then heard from the hon. Member for Vale of Glamorgan (John Smith), who spoke up, as he has on so many occasions, for the St. Athan project, which is supported in all parts of the House. I reiterate the point that I made when I intervened on him: one of the most important aspects of St. Athan is that it provides highly skilled military jobs for young people and, specifically, that it offers those opportunities to young people from Wales. Wales has a fine military traditioneverybody in the House knows thatand St. Athan will be a huge asset to young people who wish to serve their country.
	The hon. Gentleman also spoke, importantly, about the M4 link road, and other Members, including the hon. Member for Cardiff, North (Julie Morgan), spoke about the importance of transport. Transport is vital, as is the improvement of transport links. One concernI have expressed it previously, as have other Membersis the potential impact of the local transport legislation that gives the Welsh Assembly the power to impose trunk road charges in Wales. I strongly suggest that at a time such as this the last thing that Welsh road users need is an additional tax on driving along roads in their own country. Although the Assembly has those powers, I strongly counsel it not to use them.
	We had an interesting contribution from the hon. Member for Carmarthen, East and Dinefwr (Adam Price), who analysed the banking crisis and spoke interestingly about the prospect of a more local form of banking that is more publicly accountable. I know that the hon. Gentleman is a student of history, so I am sure that he will recall the efforts of Richard Williams of Llandudno at the end of the 1960s, who formed a company called Prif Trysorfa Cymru, or the Chief Welsh Treasury. That attracted some concern from the Board of Trade, so he renamed it the Welsh Black Sheep bank and issued 1 and 10 shilling notes. I am not sure whether the hon. Gentleman is interested in resurrecting that bank, but it is an interesting prospect.
	Talking of black sheep, we then had a contribution from the right hon. Member for Islwyn (Mr. Touhig). I do not intend any personal criticism of him; I am merely echoing the words of the hon. Member for Newport, West (Paul Flynn). The right hon. Gentleman made his usual robust points in his usual robust style. He expressed concerns that many Opposition Members have about the potential for the balkanisation of Britain if devolution is not handled sensitively. He made the important point that the Welsh language LCO must be carefully scrutinised. My party yields to no one in our support for the Welsh language, but we do not want to see it become a tool for division. Therefore it is important that that LCO is scrutinised with great thoroughness.
	The hon. Member for Montgomeryshire (Lembit pik) spoke of the downturn in the economy and the effect on his constituency, which is primarily rural. He also expressed his concerns also about electronic identification of sheep and the closure of businesses in his constituency, which he says has been in recession for some three years. He also spoke in favour of green technology, but against wind turbines.
	We then heard from the hon. Member for Cardiff, North, who also touched on economic issues and spoke about the need to improve transport links. She also spoke approvingly about St. Athan, and of the interesting ProAct programme, which I would like to hear more about, as it appears to be very innovative. At the moment, its achievements are small, but from tiny acorns do mighty oak trees grow. The hon. Lady also mentioned the Severn tidal barrage: she made the important point that the project could have huge environmental benefits, but could also have huge environmental disbenefits. Careful scrutiny of the project will be needed to balance those competing concerns.
	We had a powerful contribution from the hon. Member for Blaenau Gwent (Mr. Davies), who spoke of the need for a review of the Barnett formula and expressed his concern about the potential for a 500 million budget cut for the Welsh Assembly. He spoke also of irresponsible banking practices and touched on the failure of regulation, which was also mentioned yesterday by the chairman of the Financial Services Authority in his evidence to the Treasury Committee. There certainly has been a failure of regulation, and I hope that the Government will address that.
	We had an upbeat contribution from the hon. Member for Newport, West. He said that his constituency is suffering from the downturn but that there have been no closures yet, and there are some bright spots. He talked about new recycling plants in his constituency, which are an extension of the green technology that may power the upturn when it comes.
	We had a contribution from my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), in which he reminded ususefullythat Wales is actually attached to England. He said that events on one side of the border have repercussions on the other, and he was right to highlight the effects that the policies of the Welsh Assembly are having on hospitals in his constituency. The Welsh Affairs Committee has touched on such matters, and it is clear that we have not got the settlement right. That is something that we have to address.
	We then heard from the hon. Member for Ynys Mn (Albert Owen), who spoke about his support for Wylfa and for Anglesey Aluminium. Both are important employers in his constituency and both are in danger from the downturn. Finally, we heard from the hon. Member for Llanelli (Nia Griffith), who expressed her concerns about the difficulty of drawing down funds for public building projects.
	The debate was dominated by economic concerns, and there is clearly an extraordinary amount of anxiety in the House about the downturn's effect on individual constituencies and on Wales as a whole. I believe that Wales has the potential to pull through those difficulties, but doing so will not be easy. I am sure that every Member of the House will work assiduously in the 12 months between now and the next time that we convene for this debate to ensure that the impact on our country is minimised.

Wayne David: It gives me great pleasure to respond to this St. David's day debate. As far as I am aware, he was not an ancestor mine, but he could be an antecedent of many of the hon. Members who have participated today. He lived a frugal life, and my hon. Friend the Member for Cardiff, North (Julie Morgan) reminded us that his only drink was water. He believed in brevity: he was a man of few words, like my right hon. Friend the Member for Neath (Mr. Hain), who gave a commendably brief speech this afternoon. He also focused on the little things in life, about which my right hon. Friend the Prime Minister reminded us in the note on this debate that he sent to all Welsh Members.
	I was pleased that nearly all those who contributed to the debate focused on the people whom they represent in their constituencies rather than on somewhat remote theories and activities. Most people in Wales are worried about the economy, and that was brought home to us in the passionate contributions from my right hon. Friend the Member for Islwyn (Mr. Touhig) and various other hon. Members, including my hon. Friend the Member for Llanelli (Nia Griffith).
	These are undoubtedly difficult times, but I want to stress that the Government are being very proactive. That is the important thing: we are doing everything that is humanly possible to demonstrate that we are on the side of ordinary people. For example, my right hon. Friend the Secretary of State and I have been travelling around Wales over the past few weeks, meeting the owners of small businesses in particular, and hearing at first hand about the difficulties that they face. We have listened to their views and ensured that they are articulated here in London, the centre of UK Government.
	The Wales Office has published the document Real help now, and it has proved to be very useful. The hon. Member for Ceredigion (Mark Williams) said that it has been extremely well received, but it is important to stress that that is not the end of the matter. The document will be constantly updated and made even more accessible to people throughout the length and breadth of Wales.
	The document clearly demonstrates how central Government here in London and the Welsh Assembly are working in partnership for the benefit of the people of Wales. I shall not go through all the schemes enumerated in it, but several hon. Members mentioned the ProAct programme, which is already delivering material benefits for people in Wales.
	Times are difficult, but it is important to stress that positive developments are also occurring in Wales, and we heard some references to them this afternoon. For instance, my hon. Friend the Member for Vale of Glamorgan (John Smith) referred to the defence technical academy, and mention was also made of the gas-fired power station in Pembrokeshire.
	My hon. Friend the Member for Llanelli said that she had heard rumours that large numbers of people from abroad might apply for jobs on infrastructure projects in her constituency. However, I assure her that we will do our utmost to make sure that the majority of those employed come from the local labour market, as it is very important that local people benefit from those investments.
	Similarly, the go-ahead has been given for a new prison at Caernarfon, as my hon. Friend the Member for Ynys Mn noted.
	A number of Members, including the hon. Members for Chesham and Amersham (Mrs. Gillan) and for Blaenau Gwent (Mr. Davies) referred to the positive developments with tourism in Wales. It is undoubtedly a very important area that we should exploit to the utmost given the value of the currency.
	Concern was expressed about a new nuclear power station to succeed Wylfa. The Wales Office is 100 per cent. behind a new nuclear power station in Ynys Mnlet there be no question about that. Members asked whether Wylfa will continue beyond March 2010. There is a possibility of that, but we will have to see exactly what the Nuclear Decommissioning Authority has to say.
	Another clear theme is the need not only to deal with the situation in which we find ourselves but to prepare and plan strategically for the future. The upturn will come, and I am confident that it will be a dynamic upturn. We have to invest in education and training, as the hon. Member for Preseli Pembrokeshire (Mr. Crabb) said. My hon. Friend the Member for Aberavon (Dr. Francis) and the hon. Member for Blaenau Gwent mentioned that, too. There can be no shortcuts. It is vital that we invest in education and trainingthere is no doubt about that.
	Equally, we have to invest in digitalisation. My right hon. Friend the Secretary of State, who is responsible for digital inclusion, is 100 per cent. behind ensuring that we have a comprehensive strategy to ensure that everyone benefits from the new technological revolution that is gathering momentum all the time.
	The hon. Member for Carmarthen, East and Dinefwr (Adam Price) had some impressive and innovative ideas about the new banking system that needs to emerge. His ideas will be well worth debating in future.
	A number of Members mentioned the need for a strategic investment in transport infrastructure. Again, the hon. Member for Chesham and Amersham referred to that, as did the hon. Member for Blaenau Gwent when he spoke about the Heads of the Valleys road. The hon. Member for Montgomeryshire (Lembit pik) referred to it, too, and I wholly agree with his comments. However, I am not so sure that I will take him up on his offer to join him on an aeroplane.
	The debate was also significant because we heard some trenchant and controversial remarks from my hon. Friend the Member for Newport, West (Paul Flynn). However, I believe that the Government of Wales Act 1998 has been very successful. Yes, it could be streamlined and improved, but basically it is working very well. One reason it is working well is the good work being undertaken by the Welsh Affairs Committee. To have good legislation, it is vital to have effective pre-legislative scrutiny. I believe that that is what the Welsh Affairs Committee provides. I say that because I shall be giving evidence to the Committee on Monday on the important issue of carers and I hope that its members will not be too hard on me.
	Obviously, another important issue that will come before the Welsh Affairs Committee is the Welsh language LCO. As a number of Members have said, it is important that in seeking to develop and promote the Welsh language we should seek consensus in Wales. We should take all the people of Wales with us, non-Welsh speakers as well as Welsh speakers. It is important to recognise that the advances with the Welsh language have been made because there has been not just an acceptance of it but positive support for it. That must be taken forward and that is the way to build the Welsh language for the future.
	May I say finally that we heard some remarks from the English hon. Member for Shrewsbury and Atcham (Daniel Kawczynski)? I certainly welcome those remarks, because it is very important that we recognise that Wales is not separate from England and that the cross-border links between our two countries are very important. The Welsh Affairs Committee, again, has highlighted the importance of that relationship at all times. However, I did take some exception to the hon. Gentleman's remarks, which were implied at least, about the future of Welsh representation. He pointed out how many electors he represents and how many the hon. Member for Montgomeryshire represents. My concern is that some people in the Conservative party might therefore conclude that we need fewer Welsh MPs, and it would be a huge mistake to go down that road [ Interruption. ] Given the mutterings that we are hearing, I think that we are beginning to see the true face of the Conservative party again. This debate shows, above all else, that Welsh MPs have a vital role to play in the future development of Wales, and long may we have positive debates such as the one we have had this afternoon.
	 Question put and agreed to.
	 Resolved,
	That this House has considered the matter of Welsh Affairs.

Paul Burstow: I am grateful for the opportunity to raise in the House the issue of housing subsidy. I look forward to the Minister's response to our short debate on important issues that are of concern to my constituents, particularly those who pay rent to my local council.
	Tenants in my constituency want a decent home, but at present far too many of them do not have one. I shall illustrate what I mean. Recently, I had the opportunity of visiting tenants on the Chaucer estate in my constituency. Tenants on the estate, especially in Chaucer house, showed me the water coming into their flats through the windows, the electrical, plumbing and heating systems that need to be renewed, the roofs that need repairing and the poor lighting and security systems that need replacing. Tenants on the Collingwood estate, especially in Balaam house, need much of the same work done to their block. Very simply, when it rains they want the rain to stay outside and not to come into their flats.
	People living on the Shanklin and Benhill estates want control of their heating costs, but above all they want new windows. The list could go on. Too many of the council homes in my constituency fail to meet the decent homes standards we all want everyone not just to aspire to but to enjoy.
	Unfortunately, my hon. Friend the Member for Carshalton and Wallington (Tom Brake) cannot be in the Chamber this evening, but he very much supports the sentiments I am expressing. If he were here, he would want the Minister to be aware of the St. Helier estate in his constituency, where 800 box bathrooms were installed more than 40 years ago, to the delight of tenants at the time. They were meant to last only for 15 years, yet they are still there today. Furthermore, they are becoming a nightmare for the tenants, not just because they are coming away from the houses but because they are also full of asbestos, which might have been thought appropriate building material 40 years ago but, as we know, is no longer acceptable.
	My purpose in seeking the debate is to askeven begthe Minister to do whatever he can to unlock the funds of 120 million allocated to Sutton by the Department for Communities and Local Government, and to do it now because the need is so great and so urgentreally urgent in the case of the box bathrooms. Against that background of need for investment in decent homes, council tenants find it hard to believe that so much of what they pay in rent does not stay in the borough.
	A tenant in my constituency paying rent to Sutton council might reasonably expect the rent to go towards maintaining their home and providing services for themselves and their neighbours who are council tenants, as would any tenant anywhere. It should be clear to tenants who is accountable for setting the rent they pay and who is responsible for the quality of housing and services they receive.
	Good government requires accountability, and accountability requires transparency. It should be easy for people to understand where the taxes and rents they pay go, but that is not the case with municipal rents. The current system is complex, unfair and unjust; even the language is obscure and hard to follow. Just what is a negative housing subsidy?
	In hard cash terms, negative subsidy means that in the coming year tenants in my constituency and the borough of Sutton as a whole will contribute 10.5 million in rent to the Treasury. That is on top of 9.8 million in the current year. In effect, tenants in Sutton, Cheam and Worcester Park pay their rent to the Treasury from 1 April until some time in the middle of August. To put it another way, 38p in every 1 of the rent they pay goes back to the Treasury as negative subsidy.
	When I meet tenants and particularly when I meet the Sutton Federation of Tenants and Residents Associations and its chair, Jean Crossby, they and she want to know where is the justice in the system. Why is their rent not spent entirely on their housing needs or on the needs of their local community?
	It is no surprise that the figures for the 28 housing stock-owning Greater London boroughs have been analysed, and the Minister would expect me to rehearse the figures with him this evening. The analysis reveals that, on a per household basis, tenants in the London borough of Sutton are paying the highest negative subsidy in Greater London. Sutton tenants have been paying the Treasury for so many years that the council's ability to provide a good management service to its tenants and properly maintain their homes has been badly compromised.
	In an answer to a question that I asked the Minister recently, he said that decisions on rents are matters for each local housing authority. I do not dispute the fact that that is true in some ways, but I shall explain why it is not entirely the case. The way that the subsidy and negative subsidy system works drives local rent-setting decisions, first, because the system allows the Government to redirect what they calculate to be excess resources in one locality to areas in other parts of the country that they calculate have a shortage of resources and, secondly, because the Government's policy of rent convergence with housing association rents has resulted in above-inflation increases in Sutton since 2001.
	This coming year in Sutton, rents will increase by 6.27 per cent. on average, in accordance with the Government's guidelines and the formulae laid down in them. That will hit families very hard. It is particularly ironic, given the Government's determination to encourage local authorities to set the lowest council tax that they possibly can, with some success across the country, but the direction of travel on rents is the opposite.
	Research by my local arm's length management organisationthe Sutton Housing Partnershiphas found that 44 per cent. of tenants do not receive housing benefit and will therefore pay full rent. One in three of those families have children under 16. The Government have a very laudable and certainly well supported target of halving child poverty. Given that those families often live just above the measure of poverty that would tip them into receiving housing benefit, it is hard to understand how the Government's rent policy and subsidy system support that goal of halving child poverty.
	I appreciate that the Department has been conducting a review. Indeed, I met one of the Minister's predecessors a couple of years ago, and we were pleased that the then Minister indicated that the review would be commenced. I understand that it might be published in April. I hope that the Minister will confirm the timetable for the publication, promulgation and implementation of its findings and recommendations, but no matter what is decided and what the Government choose to do, it will take time to have effect.
	The Sutton Federation of Tenants and Residents Associations tells me that, while it waits for those decisions to be made and the changes to be implemented, there should be no further increase in the amount that tenants pay to the Treasury. That is not an unreasonable point, and on the association's behalf I ask the Minister to say in his response whether the Government will seriously consider freezing negative housing subsidy at 2008-09 levelsif not, why not?until the review is concluded and acted upon.
	Of course, this is not just about redistributing rental income from one poorish set of tenants to an even poorer set of tenants, to benefit their area because it does not have enough resources. The Treasury is a net beneficiary of the system; it pays out less in subsidy that it gets back in negative subsidy. Indeed, in 2008-09, the Treasury pocketed 200 million of tenants' rents. What is happening to that money? Where is the transparency that will allow us to see what is happening with it? Where is the accountability?
	I am told that, by 2011, the Treasury will profit from the housing subsidy system to the tune of 400 million, and nothing in the system as currently conceived and implemented will stop that rising still further. In that sense, I agree with the Local Government Association and many others who say that the current system is not fit for purpose.
	The current system leaves vital local services such as the building, repair and maintenance of council housing starved of cash. All the money in the housing system should be spent on homes and related services. The current system undermines local decision making, and makes it hard to hold local councillors to account for their actions; they could argue, and with some legitimacy, that the Department has not done its bit in making sure that local need is properly met. That is why the current system should be scrapped.
	Local housing should be managed and funded locally in the interests of tenants and of meeting local housing needs. In my area there is not much local housing because of the right to buy. Day after day, when people come to my surgery or write to me, I am confronted with the appalling situation of having to explain how limited the ability to help is, because the supply is not there to meet their legitimate housing needs. I am sure that many hon. Members share those sentiments.
	I began this debate by listing some of the problems with housing in my constituency. The Minister will know that Sutton established an arm's length management organisation in 2005 with the aim of bidding for decent homes funding. I understand that the Department has confirmed that an allocation of 120 million has been made for that purpose, but that money is locked up and waiting for an Audit Commission inspection of the ALMO. Last year, the ALMO narrowly missed the two-star outcome required to trigger the release of the money. Since then, efforts have been redoubled to make sure that it exceeds that standard when the next inspection takes place.
	Just last week, Councillor Sean Brennan, the leader of Sutton council, wrote to the Minister for Housing to urge her to exercise discretion and authorise the release of the 120 million now so that work on the borough's decent homes programme could get started. At a time such as this, when the economy needs all the stimulus that it can get, much needed investment could be a vital lifeline for the construction trades in my area and make an enormous difference to the quality of life of many of my constituents.
	In conclusion, I am grateful to have had this opportunity to air these issues in the House this evening. Tenants in my constituency face a 6.27 per cent. rent increase this April; 38p in every 1 of their rent will go to the Treasury. There is a desperate need to invest in social housing in my area and to deliver the decent homes standards. On 25 March, tenants from the London borough of Sutton will come to Westminster to lobby for the fair deal that I have been talking about. They will deliver a petition to the Prime Minister at No. 10 Downing street.
	My final request is this. Will the Minister, or the Minister for Housing, meet me, my hon. Friend the Member for Carshalton and Wallington and a small deputationwe do not want to overwhelm anyoneof our constituents, so that they can make their case personally and directly and ask the questions on their minds about the issues that I have tried to describe this evening? Better still, will the Minister accept an invitation from me to visit Sutton? He could have a look at some of the issues that I have described in words today, but are often better seen first hand in the constituency. He could talk to some of the tenants whom I have mentioned this evening, and the officials, to discuss the challenges. I hope that the Minister will be able to give a positive response to that request and meet at a time acceptable to us all.
	Above all, I have raised this issue tonight on behalf of constituents who want a fair and transparent system of housing finance, a rapid end to a discredited and unfair systemand decent housing.

Iain Wright: I congratulate the hon. Member for Sutton and Cheam (Mr. Burstow) on securing this debate. He may be aware that we had a very good debate in Westminster Hall yesterday afternoon on the matter of council housing and rents policy. Many of the points raised in yesterday's debate have been echoed by him tonight. I agree that housing in general, the role of the local authority in providing housing, the cost of providing housing, and the rent that tenants of council housing properties pay are incredibly important issues. As the hon. Gentleman rightly said, it all comes down to decent homes. I am grateful to him for giving me the opportunity to address the points again.
	Yesterday, in my opening remarks, I made very clear the role of central Government in the setting of council house rents; following the hon. Gentleman's speech, I feel that I have to do so again. He hinted that central Government somehow impose high levels of rent increases on tenants that are at odds with current levels of inflation and with what local councils want to do. I have to confirm to the House that that is emphatically not the case. Rent setting for council house tenants is a matter for each local authority. He mentioned accountability; local authorities are accountable to their electorate for rent setting. Guideline rents for local authorities form part of each year's housing revenue account subsidy determination, for the purposes of making assumptions about a local authority's income and its entitlement to subsidy. However, we do not, and cannot, force a local authority to set a particular increase in rents. I repeat: rent setting, particularly the matter of deciding the annual increase in rents paid by tenants, remains a matter for the local authority.

Iain Wright: I will come to that. The hon. Gentleman makes an important point, which is essentially the fundamental point of the debate, about how we fund council housing.
	Since the 1930s, successive Governments have used the subsidy system that the hon. Gentleman mentions to ensure that the country's council housing stock is funded and maintained. He is aware that as matters stand, the national housing revenue account redistributes revenue from councils that are deemed to have surplus income on housing to local authorities that do not have enough. The policy is that social rents should be affordable and below those of the private rented sector. We are very keen to ensure that councils do not raise their rents beyond what people can afford, although I should preface that by saying that local authorities are free to set whatever rents they like. Some councils are unable to raise locally what they need to spend on their council housing stock, so as a means of keeping all rents affordable the housing revenue account system redistributes resources from councils that make more in rental income than they spend to those that do not have enough.
	I think that the hon. Gentleman would agree that in basic terms there is a logic and a rationale for having redistribution. It brings a degree of equity between councils. It protects certain tenants from very high rent bills, and it helps by not adding to the burden of the general taxpayer. When discussed like that, it seems simple, straightforward and something that could possibly be welcomed. It is certainly better that the situation that occurred before 1989, whereby council house tenants' rents were allowed to be used locally to keep the rates of more affluent residents artificially low. It is also better than the situation that we inherited in 1997I know that this concerns the hon. Gentlemanwhen we had a backlog of some 19 billion in repairs and maintenance in the council housing stock. He is aware that we initiated the decent homes programme, which has transformedrevolutionised, I would suggestthe fabric and condition of social housing up and down this country. In 2001, we brought in the major repairs allowance, which provided 1.5 billion: a massive injection of resources to stop long-term deterioration of the stock.
	Those factors, together with allowances for management and maintenance and provision for debt, are resourced through the subsidy systemtenants' rents and, when needed, subsidy from central Government. However, I am fully aware of the argument that the hon. Gentleman has made. I am also fully aware of the sense of despair and frustration at local examples of unfairness, and often of sheer incomprehension in respect of the complexities of the situation. I do not disagree with any of those sentiments. The annual subsidy determination process has become more difficult to understand and the process more opaque and baffling to councils and council house tenants alike. The current system, with its annual subsidy determination, is too short- term in its scope. The need to make decisions on funding year on year makes it difficult for councils to plan, manage and maintain their assets over the long term. As the hon. Gentleman saidI agree with him fully on thisit is difficult, if not impossible, for tenants to see a clear link between the rents they pay and the services that are provided locally.
	This lack of local transparency is a particular concern of mine, especially as the Government are absolutely determined to see decisions on services made locally and in a transparent way. In addition, the whole landscape of housing has changed over the past 20 to 25 years with the emergence of large scale voluntary transfers, a greater number of tenants with registered social landlords and right to buy. As a result, there are increased levels of mixed tenure on estates that 20 years ago might have been purely council housing estates. Bearing all of that in mind, it is right and proper to look again at the HRA system and its rules to ensure that it operates in the fairest possible way for both tenants and council taxpayers.
	The hon. Gentleman mentioned that this year we have had the added complication of the housing revenue account system moving into surplus, which then goes back to the Treasury. As he rightly said, about 200 million was generated in surplus from the HRA this year. I fully understand that that is grossly unpopular with tenants throughout the country, but we should put it into some sort of context. This year, the Treasury is pumping 5.9 billion into housing expenditure, which puts the 200 million surplus from the HRA into some degree of perspective. Secondly, since 2001, there has been a deficit in the housing revenue account system, which has been topped up by the Exchequer to the tune of about 1.3 billion. Thirdly, the national HRA was in overall surplus from 1994, the first year in which we have records, to 2001. So I plead with the hon. Gentleman that we need to have some degree of perspective and to understand that we are not looking at some unprecedented or unique feature.
	We currently have a system of financing council housing that moves periodically from surplus to deficit and back into surplus. I hope that the hon. Gentleman appreciates that I understand people's frustrations with regards to the current system, and I especially understand the frustration of tenants in Sutton, where the HRA system has been consistently in surplus over the past couple of years and redistributed away from the area. That is why we have embarked upon a fundamental review of council housing finance. The review was launched last year and has as its objective the need to develop a sustainable long-term system for financing council housing while taking into account the following key principles: fairness and affordability for tenants and taxpayers; transparency to ensure, as I said earlier, a clear and accurate relationship between services provided and rents paid; agreed minimum standards of service and accommodation, ensuring that council house tenants are not hindered by poor levels of management and maintenance, which the hon. Gentleman mentioned; and more certainty and less volatility in the funding of council housing. I am keen to see greater levels of efficiency and value for money, with more emphasis upon planned, as opposed to reactive, maintenance. I hope that the review will look into that.
	The review is on track to report to Ministers in the spring, and thereafter we will go out to consultation to discuss the revised process. As I have said before at this Dispatch Box, given the huge importance and complexity of the process, it is not something that can be tinkered with around the edges or undertaken quickly. It needs to be considered as part of a fundamental look at how council housing should be funded. We want to make the system fairer to tenants and do not wish to take risks in a way that would hinder that objective.

Iain Wright: I understand why tenants in Sutton would want to think that, but I would throw that question back. There are about 50 local authorities in the country that receive subsidy at the moment because their need for housing cannot be provided locally through the setting of rents. What do we do with those 50 local authorities? That is a fundamental point. There may be some means of having a transition period in order to move a fairer system, but to tinker with things while undertaking a fundamental review would be wrong and misplaced, so I cannot give residents in Sutton the reassurance they would wish for. However, we are fully aware of people's concerns and want to ensure that the system is fairer and more transparent and that we fund council housing sustainably.
	The hon. Gentleman said that he is going to bring a delegation of residents downI think that he said that it would be on 25 March. I would be more than happy to meet them to discuss the matter further. I am keen to see that his tenants and every other tenant up and down the country have access to decent and sustainable housing in a way that is fair to council tax payers, general taxpayers and tenants alike.

Paul Burstow: I am grateful to the Minister for the opportunity to meet him. We will be in touch to sort out the logistics, and I am sure that having read this debate, tenants will appreciate the opportunity to discuss these exchanges with him. Will he address the other concern that I raised, which was the need to unlock the decent homes funding? That is the other thing that many tenants in my area want sorted out.

Iain Wright: Again, I understand the concerns, and I believe that something in the region of 113 million could be available. The hon. Gentleman will be aware that the London borough of Sutton did not do as well as we would have hoped in the latest inspection, which could have unlocked those resources. I understand that the area will be subject to a second inspection in October, and I am sure that my Department and my officials will be keen to work with officers of the London borough of Sutton to ensure that we can unlock that money, which could be vital in helping to provide decent homes for tenants in his constituency.
	I hope that I have addressed the matter in a measured way. I understand the frustrations and concerns that exist, but we cannot make knee-jerk, rapid decisions on such an important and complex matter. It needs to be examined in the round and fundamentally, because it has an impact on general taxpayers as well as tenants. I am keen to ensure that we have a system for financing council housing that is fair and sustainable in the long term, and that council housing has a key role to play in the housing offer of this country in the 21st century.
	 Question put and agreed to.
	 House adjourned.